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This Week's Featured Content Expedia Stock Turns Volatile After Rally. Where Does It Go Next?By Jennifer Ryan Woods. First Published: 3/20/2026. 
Key Points - Expedia shares more than doubled between April and January after a series of strong earnings reports, but the stock became volatile heading into its fourth-quarter results and fell further after the report as investors reacted to expectations for slower margin expansion.
- Analyst sentiment remains mixed, with the stock trading below its recent highs even as the average price target suggests roughly 17% upside.
- Expedia’s strong balance sheet, growing B2B business, and continued travel demand support the bullish case, but rising short interest, macroeconomic uncertainty, and concerns about margin growth suggest the stock could remain volatile even if the long-term outlook remains positive.
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Shares of online travel company Expedia Group (NASDAQ: EXPE) have hit some turbulence. After more than doubling over the past year as the company delivered several quarters of strong results, the stock climbed to a 52-week high in January. Soon after, however, shares began to pull back. The decline accelerated following the release of the company's fourth-quarter 2025 earnings on Feb. 12. Although the stock has regained some ground since then, trading remains volatile, leaving investors to wonder whether the drop from its highs is a buying opportunity or a sign the rally has cooled. Mixed Signals Leave Investors Uncertain Investors are getting mixed signals about where Expedia's stock might go next. On the positive side, analyst price targets point to meaningful upside from current levels, and valuation metrics suggest the stock may still be undervalued. News that OpenAI abandoned plans to move directly into travel bookings also eased concerns over potential disruption to online travel agencies. The company's fundamentals remain solid, with strong growth in its B2B and advertising businesses that management expects to continue into 2026. The balance sheet is likewise in good shape, with more than $5 billion in cash and manageable debt. That said, there are reasons for caution. Macroeconomic pressures — including geopolitical tensions, higher fuel prices and weak consumer sentiment — could weigh on travel demand. Investors are also watching whether Expedia can sustain margin improvement in the year ahead. Strong Earnings Fueled the 2025 Rally A new wave of enthusiasm for Expedia began after the company's better-than-expected second-quarter 2025 earnings, when the company returned to profitability amid strong bookings and advertising revenue. Its consumer segment, which had been weak, also began to stabilize. Momentum picked up further after the third-quarter report. Wall Street rewarded another quarter that beat expectations, with continued growth across Expedia's business segments. Shares, which had already climbed about 68% between April and the Q3 results, rose more than 20% in the two days following the report as a wave of analysts raised price targets. The rally continued through the end of 2025, with the stock gaining another 38% before reaching an all-time high of $303 on Jan. 9. Profit Taking and Margin Concerns Trigger Pullback After peaking, momentum began to fade. Some profit-taking followed the strong run, and the decline accelerated after the fourth-quarter report — even though the company posted double-digit growth in bookings and revenue and beat analyst expectations. Expedia also issued optimistic guidance for 2026, but investors focused on management's view that EBITDA margin expansion would be more moderate than in the prior year. That more cautious margin outlook sent shares down roughly 12% in the sessions following the release. There is a case that the stock could resume higher moves. Analyst sentiment is mixed — 22 Hold ratings and 13 Buy ratings — but the average 12-month price target is about $281, suggesting roughly 17% upside from recent prices near $240. Valuation Suggests Expedia May Still Be Undervalued Even with shares up more than 45% over the past year, Expedia may be undervalued versus peers. The company's price-to-earnings growth (PEG) ratio of about 0.71 is lower than several competitors: Booking Holdings Inc. (NASDAQ: BKNG) has a PEG of 0.97, while Airbnb Inc. (NASDAQ: ABNB) sits at about 1.55. Expedia also trades at a lower price-to-sales (P/S) ratio of roughly 2.01, compared with about 5.22 for Booking and 6.55 for Airbnb, and far below the broader internet commerce industry average near 26. Its price-to-earnings ratio of about 24.5 is below Booking's and Airbnb's (26.7 and 32.7, respectively), though slightly above the industry average of around 20.4. Volatility Likely to Continue Despite Upside Potential Valuation alone does not remove the risks. Macroeconomic uncertainty remains a major concern: geopolitical tensions in the Middle East, rising fuel costs and weakening consumer sentiment could all pressure travel demand, particularly among budget-conscious travelers. Short interest has also been rising. About 7.4% of Expedia's float is currently sold short — the highest level since June 2021 — indicating a growing number of investors are betting the stock could slip further. Overall, Expedia's outlook is mixed. The company continues to show solid fundamental growth, its valuation looks attractive, and analyst price targets point to upside. At the same time, slower margin expansion, macroeconomic risks, the stock's sharp run over the past year and rising short interest could keep trading choppy in the near term. For investors willing to tolerate that volatility, the recent pullback may present an opportunity, but the path forward for Expedia stock is unlikely to be smooth. | 
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