Expedia Inc Stock Upgraded (EXPE)

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.

NEW YORK ( TheStreet) -- Expedia (Nasdaq: EXPE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, notable return on equity, reasonable valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 24.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 31.37% and other important driving factors, this stock has surged by 68.51% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Internet & Catalog Retail industry and the overall market, EXPEDIA INC's return on equity exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for EXPEDIA INC is currently very high, coming in at 80.43%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 5.97% is above that of the industry average.

Expedia, Inc., together with its subsidiaries, operates as an online travel company in the United States and internationally. Expedia has a market cap of $9.29 billion and is part of the services sector and leisure industry. Shares are up 21.3% year to date as of the close of trading on Monday.

You can view the full Expedia Ratings Report or get investment ideas from our investment research center.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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