Expedia Group (EXPE) has already had its “easy” part of the move. The stock printed a 52-week high of $303.80 on 01/09/2026, and since then it’s been digesting. That’s exactly the kind of spot where investors start telling themselves the rally is over and the multiple is stretched.
I don’t think that’s the right read. At around $269.38 today, EXPE looks less like a broken momentum name and more like a large-cap travel compounder that’s pausing after a strong run. The valuation is not screaming cheap on headline P/E, but when you frame it through cash generation and enterprise value, the rally still looks justified. More importantly for a trade, the technicals have cooled enough to give you a defined entry with a stop that actually makes sense.
Thesis: EXPE’s fundamentals (cash flow and profitability metrics) and valuation (EV/EBITDA and free-cash-flow multiple) still support the post-earnings re-rate, and the current pullback is a tradable reset rather than a trend change.
Where EXPE makes money, and why the market cares
Expedia is not a single-brand story. It’s a scaled online travel platform spanning B2C, B2B, and Trivago. B2C is the consumer-facing engine (travel shopping, bookings, advertising). B2B is the less-talked-about but strategically important plumbing layer, where Expedia supplies travel inventory and services to other businesses. Trivago sits on the metasearch/advertising side, monetizing referrals.
The market cares because online travel is a scale business with real operating leverage when demand is healthy and the platform is executing. When Expedia shows it can grow bookings and expand margins at the same time, investors are willing to pay up. That dynamic was on display in the Q3 read-through that helped ignite the rally: one widely-circulated recap noted 9% revenue growth, 12% growth in gross bookings, and expanded profit margins, with management crediting AI-powered tools and corporate partnerships for share gains.
Whether you love the “AI tools” narrative or roll your eyes at it, the practical point is this: Expedia is demonstrating it can capture demand and monetize it efficiently. That’s the fundamental driver behind the re-rating, and it hasn’t obviously gone away just because the stock is consolidating.
The numbers that matter right now
| Metric | Current / Recent | Why it matters |
|---|---|---|
| Price | $269.38 | Down from $303.80 high, giving a better entry window |
| Market cap | $33.0B | Large-cap liquidity, tradable, and institutions care |
| Enterprise value | $33.41B | Useful anchor for EV-based valuation (debt included) |
| P/E | ~23.79x | Not cheap, but not bubble pricing either |
| EV/EBITDA | ~11.8x | More reasonable than the P/E headline suggests |
| Free cash flow | $2.958B | Supports valuation and buyback/dividend capacity |
| P/FCF | ~11.16x | For a scaled platform, this looks workable |
| Dividend yield | ~0.46% | Not the story, but signals shareholder return focus |
The most underrated line in that table is the free cash flow number. At roughly $2.96B in free cash flow against a ~$33B market cap, the equity is not priced like a “hope stock.” The ~11.16x price-to-free-cash-flow multiple is the kind of valuation that can keep working if operations stay solid. You don’t need heroic assumptions to justify it.
Yes, P/E in the mid-20s can look full if you think travel demand is peaking. But EV/EBITDA at ~11.8x is a cleaner way to compare across cycles and capital structures, and it reads more like “quality cyclical” than “overheated momentum.”
One nuance I don’t ignore: Expedia’s balance sheet leverage shows up in ratios. Debt-to-equity is listed around 4.65, and liquidity ratios (current and quick) are both around 0.66. That’s not automatically a deal-breaker for this business model, but it does mean you want to be paid via valuation and execution. The good news is the cash flow generation helps offset that concern.
Valuation framing: why the multiple still makes sense after the rally
If you’re looking for a single sentence: EXPE is not priced like a distressed cyclical, but it’s also not priced like a growth darling. It’s priced like a profitable platform with credible operating leverage.
At ~$269, the stock is about 11% below the $303.80 peak. Meanwhile, the company throws off billions in free cash flow and trades at ~2.3x price-to-sales with ~8.84x price-to-cash-flow. Those aren’t the optics of a stock that “must” collapse if growth normalizes. They’re the optics of a business the market is willing to own through the cycle, as long as execution stays tight.
Without peer multiples in front of us, the best way to judge “expensive vs fair” is internal logic: if EXPE can keep converting demand into cash, an ~11x free cash flow multiple is not outrageous. If cash flow falters, the stock will deserve a lower multiple. That’s the fulcrum.
Technical setup: the rally cooled off, which is constructive
From a trader’s perspective, what I like here is that the stock isn’t ripping higher in a straight line anymore. It’s cooling. Today’s tape shows $266.32 to $271.60 with price around $269.38, and the 10-day and 20-day averages sit higher (SMA-10 ~$280.35, SMA-20 ~$285.73). RSI is around 41.7, and MACD is flagged as bearish momentum.
That sounds negative until you translate it: the froth has come out. If you wanted to initiate a long based on fundamentals, you’d rather do it when momentum has reset than when RSI is screaming overbought near the highs. The trade becomes about capturing a rebound toward the moving averages and prior breakdown zones, not chasing.
Short positioning also isn’t trivial. Days-to-cover recently sits around 5.13 (as of 12/31/2025 settlement data). That doesn’t guarantee a squeeze, but it can add fuel if price turns up and the narrative stabilizes.
Catalysts (what could push EXPE higher)
- Continuation of the “operating leverage” narrative - the market already rewarded margin expansion once; a repeat tends to keep the multiple supported.
- Reversion toward key moving averages - with the 20-day SMA near $285.73, a simple mean-reversion move is meaningful upside from $269.
- Sentiment lift from sector headlines - for example, regulatory scrutiny hitting a major competitor can redirect investor attention to alternative platforms.
- Positioning - with days-to-cover above 5, a turn higher can force some incremental buying from shorts managing risk.
The trade plan (actionable)
I’m structuring this as a mid term (45 trading days) long. Why 45 days? Because EXPE is currently below its short-term trend (10-day and 20-day averages). It typically takes more than a week for a large-cap like this to repair a momentum unwind and work back toward those levels, especially with MACD still negative. The goal is to catch a rebound phase, not predict tomorrow’s candle.
- Direction: Long
- Entry: $269.00
- Target: $294.00
- Stop loss: $259.00
How I’m thinking about those levels:
- The entry is basically “here,” slightly below current price, aiming for a fill without getting cute.
- The stop at $259 sits below today’s low ($266.32) with extra room for noise. If EXPE loses the mid-$260s and keeps sliding, I don’t want to debate it.
- The $294 target is intentionally below the $303.80 high. I’m not asking for a full retest of the peak - I’m looking for a solid mean reversion toward the zone the stock sold off from and closer to the 20-day trend area.
This is a trade where discipline matters. If the stock chops sideways for two weeks, that’s not failure. If it breaks $259, that’s the market telling you the pullback is deeper than a reset.
Risks and counterarguments (don’t ignore these)
- Momentum can stay negative longer than you expect. MACD is bearish and price is below the 10-day and 20-day averages. Plenty of “good companies” keep falling during technical unwinds.
- Leverage and liquidity optics. With debt-to-equity around 4.65 and current/quick ratios near 0.66, the market may be less forgiving if travel demand softens or if there’s any operational stumble.
- Travel demand is cyclical. If the macro backdrop shifts or consumers pull back, OTAs typically feel it through lower booking volumes and higher competition for demand.
- Competitive intensity. Online travel is crowded. Even if a competitor faces regulatory noise, pricing competition and marketing spend can pressure profitability.
- Headline risk around partnerships and distribution. Changes in affiliate relationships or distribution channels can create sudden narrative shocks, even if the core business is fine.
Counterargument to my thesis: The simplest bear case is that the rally already “pulled forward” optimism after strong results, and now the stock is repricing to a more normal travel multiple. In that scenario, the P/E in the mid-20s is the wrong anchor, and investors may decide they’d rather own travel exposure at a lower valuation. If that’s what the market is doing, you’ll see it in price: failed bounces and lower lows. That’s why the stop matters here more than the story.
Conclusion: I’m constructive, but I want price to prove it
EXPE at ~$269 looks like a fundamentally supported winner that’s taking a breather, not a stock that has lost the plot. The free cash flow profile (about $2.96B) and the valuation through that lens (around 11x FCF, ~11.8x EV/EBITDA) still justify owning the move, even after last year’s surge.
I’m a buyer at $269 with a $294 target and a $259 stop over a mid term (45 trading days) window. What would change my mind is straightforward: a breakdown that holds below $259, or repeated failed rallies that keep EXPE pinned under the declining short-term averages. If that happens, it’s no longer a reset. It’s a trend change, and I’d step aside.