Fundamental factors: Wall Street has noticed the company's recent earnings report and 18 firms have assigned 25 analysts to predict the company's numbers. They project an increase in revenue of 13.8% for this year and another 11.4% for next year. Earnings are estimated to increase by 9.1% this year, an additional 18.3% next year and continue to increase annually at a rate of 12.81% for the next five years. At these growth rates the 17.37 P/E ratio is not much higher than the market's P/E of 15.50. The dividend rate of about 1% is only 15% of projected earnings. The financial strength is B+ and TheStreet rates this a B- stock. Investor interest: Analysts have issued one strong buy, six buy, 16 hold and two underperform recommendations on the stock and estimate investors could see a 10% to 12% annual total return over the next five years. The individual investors reading Motley Fool had 440 readers give the stock a 78% vote of confidence to beat the market. I'd especially like to note how fast the short sellers are covering their positions which have dropped from five million share in July to less tah 2.5 million share recently. Peer competition:Over the past year the market voted in Expedia's favor also, and while its price was up 109%, Priceline.com ( PCLN) was up 17%, Orbitz Worldwide ( OWW) was up 21% and Kayak ( KYAK) was down 2% since opening earlier this year. Priceline.com has a P/E of 21.52 and an A financial strength rating. TheStreet rates the stock an A- and analysts look for a revenue increase of 16.20% next year and earnings to increase by 20.89% annually for the next five years. Orbitz Worldwide has a P/E of 17.50 and a financial strength of C+. The Street rates it a C- stock and revenue should increase by 5.9% next year and earnings are estimated to continue to increase at an annual rate of 10% over the next five years. Kayak has not had a full year to report yet but is expected to have revenue increases of 24.5% this year and increase earnings annually by around 21.71% over the next five years.
Conclusion: Expedia is a triple D stock with analysts projecting double-digit increases in revenue, earnings and stock price. P/E is not out of line with the growth projections. Please watch the recent price increase for continued momentum. As always, if you jump in now watch the 20-, 50- and 100-day moving averages and the 14-day turtle channels for weakness and overbuying:
This article was written by an independent contributor, separate from TheStreet's regular news coverage.