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Expedia currently trades on a PE of about 23.3x. That is roughly in line with the broader Hospitality industry average of around 23.4x, but below the peer group average of about 27.9x. This suggests the market is a bit more cautious on Expedia than on some comparable names. To refine this further, Simply Wall St calculates a proprietary Fair Ratio of 29.6x for Expedia, which reflects its specific mix of earnings growth prospects, profitability, industry positioning, market cap and risk profile.

This Fair Ratio framework is more tailored than a simple peer or industry comparison, because it adjusts for Expedia’s own fundamentals rather than assuming all companies deserve the same multiple. Comparing Expedia’s current 23.3x PE to the 29.6x Fair Ratio points to the shares trading below what its fundamentals would typically warrant.

Result: UNDERVALUED

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Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Expedia Group’s business with a financial forecast and a fair value estimate. A Narrative is your story behind the numbers, where you spell out what you believe about Expedia’s future revenue, earnings and margins, and the platform turns that view into a clear forecast and implied fair value. On Simply Wall St’s Community page, millions of investors can create and compare these Narratives, making it an easy, accessible tool for deciding whether to buy or sell by comparing each Narrative’s Fair Value to today’s Price. Narratives are updated dynamically as new information, like earnings or AI related news, comes in, so your story can evolve with the facts. For example, one Expedia Narrative might assume strong AI driven efficiency, rising margins and a fair value closer to the upper analyst target of about $290. In contrast, a more cautious Narrative might focus on competitive and platform risks and arrive nearer the lower target of around $168.

Do you think there’s more to the story for Expedia Group? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include EXPE.

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