Expedia shares enjoyed a sharp rise a day after reporting better-than-expected earnings. Share value spiked 18% to $58.94 by Thursday afternoon.
Earnings of $1.43 a share beat the $1.35 a share expectation of analysts surveyed by Yahoo! Finance. Revenue of $1.4 billion surpassed expectations by $30 million and grew 17% year over year.
The Washington state-based company said revenue growth was driven by 20% year-on-year increases in hotel room bookings, as well as advertising profits. International sales, which increased 23% year on year excluding exchange rates, contributed 49% to total revenue, higher than 46% a year earlier.
Bank of America upgraded the stock to "buy" and revised its price target to $75 from $60, due to "accelerating bookings in 3Q and sector multiple expansion." Benchmark reiterated its "buy" rating and revised its price target to $73 from $66.
TheStreet Ratings team rates EXPEDIA INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate EXPEDIA INC (EXPE) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 deteriorating net income, disappointing return on equity and weak operating cash flow."