Trade-Ideas: Expedia (EXPE) Is Today's

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Expedia ( EXPE) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Expedia as such a stock due to the following factors:

  • EXPE has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $177.6 million.
  • EXPE has traded 2.7 million shares today.
  • EXPE is down 3.1% today.
  • EXPE was up 5.1% yesterday.

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More details on EXPE:

Expedia, Inc., together with its subsidiaries, operates as an online travel company in the United States and internationally. The stock currently has a dividend yield of 1.3%. EXPE has a PE ratio of 18.4. Currently there are 6 analysts that rate Expedia a buy, no analysts rate it a sell, and 11 rate it a hold.

The average volume for Expedia has been 3.5 million shares per day over the past 30 days. Expedia has a market cap of $5.7 billion and is part of the services sector and leisure industry. The stock has a beta of 0.13 and a short float of 9.3% with 2.65 days to cover. Shares are down 24.4% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Expedia as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 18.0%. Since the same quarter one year prior, revenues rose by 15.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Despite currently having a low debt-to-equity ratio of 0.56, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.71 is weak.
  • Net operating cash flow has decreased to $318.52 million or 42.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of EXPEDIA INC has not done very well: it is down 10.16% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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