Cantor Fitzgerald has reduced its price target for Expedia Group (NASDAQ:EXPE) to $245.00 from $285.00, while leaving its rating on the online travel company at Neutral. The change comes amid mixed signals: operational strength in the most recent quarter contrasted with lingering uncertainty about how artificial intelligence developments could affect the online travel agency model.
Expedia reported fourth-quarter results that outpaced prior street estimates on EBITDA by 11%. The company recorded year-over-year growth in total room nights of 9% and bookings growth of 11%. When excluding foreign exchange effects, bookings growth was 10%.
Several profitability and financial-strength metrics stood out in published data. Expedia's gross profit margin was reported at 89.94%, and the company held a Piotroski Score of 9, signaling strong balance-sheet and operating performance across the score's measures.
Segment-level trends were also notable. Expedia's B2B business delivered bookings growth of 24% in the quarter, and each of the company's three consumer brands within the B2C segment reported positive growth. Management provided forward guidance that suggested continued expansion in demand, guiding first-quarter bookings growth and preliminary fiscal 2026 bookings growth to 8% and 6%, respectively, at the mid-point when excluding foreign exchange impacts.
On margins, management projected an EBITDA margin improvement of 100 to 125 basis points in fiscal 2026. Company commentary also highlighted prospective opportunities from integrating AI capabilities both directly into Expedia's platform and via third-party AI agents.
Despite the upbeat operational picture and management commentary on AI opportunities, Cantor Fitzgerald analyst Deepak Mathivanan increased his fiscal 2027 EBITDA estimate by 4% yet maintained a Neutral recommendation. The analyst's stated rationale centers on ongoing debate about potential AI-related risks to online travel agents and a desire for greater clarity around Expedia's AI strategy before upgrading the recommendation.
Market reaction to the combination of results and the analyst note has been mixed. The stock has fallen 19.79% year-to-date and, according to InvestingPro data cited alongside this coverage, is trading below its calculated Fair Value, which could imply upside for investors prepared to look past immediate concerns.
Additional reported financial details from the quarter included adjusted earnings per share of $3.78, above the $3.25 consensus figure, and revenue of $3.55 billion, ahead of an expected $3.41 billion. These beats underscore the stronger-than-anticipated performance in the recent quarter and will likely factor into analysts' ongoing assessments of Expedia's prospects.
Bottom line: Expedia delivered a solid quarter on several key operating and financial metrics, and management outlined margin expansion and AI-related opportunities. Nonetheless, Cantor Fitzgerald's cut in the price target and maintenance of a Neutral rating reflect continued caution around AI-related risks to the online travel agency model and the need for clearer execution on AI strategy, even as some forward estimates were nudged higher.