Citizens has maintained a Market Perform rating on Expedia Group Inc. (NASDAQ:EXPE), reiterating a neutral stance toward the travel-booking operator despite signs of improving execution and recent upside in core metrics. The stock has dropped 11.95% over the past week, and InvestingPro data indicates the shares are trading below their Fair Value, implying potential upside from current levels.
The firm highlighted that Expedia has made tangible progress on several strategic priorities. Citizens pointed to enhancements that aim to deliver greater value to travelers, including personalized, AI-driven features, property-funded promotions and loyalty initiatives. Those efforts coincide with robust profitability and revenue momentum: Expedia reported a gross profit margin of 90.12% and 7.61% revenue growth over the last twelve months.
Citizens also noted strength across business-to-business (B2B) and advertising lines, with the company expanding margins through improved marketing efficiency in its business-to-consumer (B2C) operations. At the same time, the analyst flagged that marketing efficiency within B2B is weakening as Expedia reinvests in that segment, a development Citizens will monitor closely as it evaluates the sustainability of profitable growth.
The analyst maintained a cautious longer-term perspective, citing Expedia's relative exposure to potential AI-driven disintermediation. Citizens believes that Expedia may be more vulnerable than some peers given the company’s higher domestic revenue mix and concentration in branded hotels. That structural view underpins the firm’s reserved rating despite near-term operational improvements.
Quarterly results and broker response
In related corporate results, Expedia reported fourth-quarter 2025 earnings that outpaced expectations. The company posted adjusted earnings per share of $3.78, above the $3.25 forecast. Revenue came in at $3.55 billion versus an expected $3.41 billion. Expedia’s EBITDA for the quarter exceeded prior street estimates by 11%.
Operational volumes were stronger as well: total room nights grew 9% year-over-year and total bookings rose 11% year-over-year, with bookings up 10% when excluding foreign exchange effects. Following the earnings release, Cantor Fitzgerald lowered its price target on Expedia to $245 from $285 but retained a Neutral rating, citing the company’s results and concerns related to AI.
Citizens’ Market Perform call reflects a balance between tangible recent gains in execution, revenue and margins, and persistent uncertainties around marketing effectiveness in B2B and the broader implications of AI for Expedia’s business model. Investors will likely watch how reinvestment choices and competitive dynamics evolve as signs of both strength and vulnerability coexist.