Tag Archives: pcln

Expedia Sees Currency As Less Of An Issue In 2016; Stock Up Late

Online travel agent Expedia ( EXPE ) late Wednesday posted Q4 earnings and revenue that missed Wall Street expectations, but executives said currency would be less of a factor this year and that they’ve seen no impact, at least not yet, from the steep drop in global stock markets at the start of this year. Shares were up after hours. Ahead of the earnings report, analysts were cautious  on global macroeconomic concerns and competition with rivals  Priceline ( PCLN ), TripAdvisor ( TRIP ) and privately held Airbnb. Expedia stock, though, was up 13% in after-hours trading, as executives seemed to assuage some fears in comments on the company’s earnings conference call with analysts. Shares of Priceline and TripAdvisor were each up 4% after hours. For Q4, Expedia said sales grew 29% to $1.7 billion, while earnings per share ex-items dropped 22% to 77 cents. The consensus estimate of analysts polled by Thomson Reuters called for $1.71 billion and $1 EPS ex items. In Q4, recently acquired Orbitz and HomeAway added $177 million and $20 million, respectively, to Expedia’s top line — which would have been $1.5 billion without them. Gross bookings rose 40%, in Q4, driven by a 28% increase from the company’s acquisitions. The strong dollar cost the company 5% of Q4 revenue growth and 9% of gross bookings growth, Expedia said. Expedia purchased HomeAway, which is focused on vacation rentals, in part because it’s a hedge against Airbnb, a firm that lets people rent out accommodations in their home to travelers. Private investors have valued Airbnb at over $20 billion — though as of late, mutual funds have been under fire for failing to properly value hot startups, such as ride-booking firm Uber and cloud storage provider Dropbox. Barclays analyst Paul Vogel said the Orbitz and HomeAway acquisitions would make it tough to estimate Expedia’s results. Expedia spent over $6 billion on those acquisitions. “There are a number of moving parts within Expedia that we believe have created an uncertain backdrop around forecasts and expectations,” Vogel wrote in a research note Tuesday. TripAdvisor is set to report Q4 earnings Thursday after the close, while Priceline is set to report earnings Feb. 17 before the open.

Yelp Advised To Stop ‘Spending Like It’s 2014’

Yelp ( YELP ) stock got at least four price-target cuts Tuesday after the troubled social media site late Monday gave weak Q1 guidance, lowered its 2016 earnings outlook and surprised Wall Street by announcing that its CFO was leaving the company. Yelp stock was down more than 3% in afternoon trading in the stock market today , near 15. Yelp stock, trading at its lowest price since June 2012, is down 85% from its all-time high of 101.75 brushed in early March 2014. The company late Monday did report Q4 earnings that beat analysts’ revenue and earnings forecasts. “After its Q4 report, we continue to expect slowing user growth, higher advertising spending and rapid sales force hiring. Yelp is spending like it’s 2014,” wrote Pacific Crest Securities analyst Evan Wilson in an industry note late Monday. “We continue to postulate that the environment has changed and it’s time for Yelp to focus on profitability instead of raw growth.” The company announced that its chief financial officer, Rob Krolik, will be stepping down “in the coming months.” Yelp said it will start looking for a new CFO immediately. UBS analyst Eric Sheridan wrote in an industry note that Yelp’s earnings translated to “disappointment today and uncertainty tomorrow.” Sheridan said that “with a lower-than-expected EBITDA (earnings before interest, taxes, depreciation and amortization) guide for fiscal year 2016 and a CFO transition ahead, Yelp’s Q4 results introduced an elevated level of uncertainty around the progress and trajectory of the business.” Sheridan was sour on the company’s Q4 EBITDA miss despite a higher contribution from its higher-margin brand-advertising business. UBS cut its price target on Yelp stock to 17 from 26. Needham & Co. cut its price target on Yelp stock to 25 from 40, while Axiom Securities cut its price target to 18 from 25. Yelp is facing competition in online reviews from multiple fronts — including from Facebook ( FB ), Apple ( AAPL ), Amazon.com ( AMZN ) and Alphabet ( GOOGL )-owned Google — as other websites build or buy their own databases of user-generated reviews to attract viewers. Yelp also competes with online travel agency TripAdvisor ( TRIP ) and Priceline Group ( PCLN ), the world’s largest Web travel-service company. Thomson Reuters noted Yelp’s Q4 EBITDA as coming in light of the consensus analyst estimate: $17.54 million vs. the $21.9 million that analysts had anticipated. Yelp posted Q4 EPS ex items of 11 cents, down 40% year over year. Yelp reported that revenue rose 40% year over year to $153.7 million. That exceeded the $152.35 million that analysts polled by Thomson Reuters had wanted to see.

Recent Expedia Acquisitions Cloud Financials; Price Target Cut

Ahead of Expedia ‘s ( EXPE ) Q4 earnings out after the close Wednesday, Barclays on Tuesday lowered its price target for the online travel agency. Barclays analyst Paul Vogel dropped his price target to 120 from 150, citing a wide range of analyst estimates for the company as it integrates acquisitions such as Orbitz and HomeAway. “There are a number of moving parts within Expedia that we believe have created an uncertain backdrop around forecasts and expectations,” Vogel wrote in a research note Tuesday. Expedia revenue  is expected to rise 26% to $1.71 billion in Q4 from $1.36 billion in Q4 2014, according to the consensus of analysts polled by Thomson Reuters. They see EPS minus items rising 16% to $1. Shares of the Seattle-based company were up a fraction in afternoon trading in the stock market today , near 91.Vogel rates Expedia stock overweight. HomeAway specializes in vacation rentals — known as alternative accommodations in industry jargon — that in part Expedia purchased as a hedge against the rapidly growing Airbnb, a firm that lets people rent out their home, a room in their home, or apartment to travelers. Analysts say rival online travel agency  Priceline ( PCLN ), is well-hedged against alternative accommodations. In a research note last year, RBC analyst Mark Mahaney said Priceline’s inventory of 361,000 properties has risen by 80% in a year. Vogel says three issues could impact HomeAway’s revenue: 1. Complications surrounding integrating its financials with Expedia. 2. The change to online booking, which will have an impact on fee revenue and renewal rates. 3. Charging travelers a fee is critical to achieving the company’s projected earnings. In terms of integrating Orbitz into Expedia, Vogel is building only a “small amount of synergies” into his financial models based on executives’ commentary on the Q3 earnings call . Vogel, who also cut his Q4 earnings estimate, says the price-target cut was necessary given the “current market environment.”