Expedia Announces CEO Change as Stock Plummets Below Key Level After Q4 Earnings Beat

Expedia Announces CEO Change Amid Quarterly Earnings Beat

Expedia, a leading online travel company, surprised investors with a change in leadership while surpassing earnings expectations for the fourth quarter. However, the stock price plummeted the following day, dipping below a crucial threshold that it had reached a day earlier as it hit a new 52-week high.

The company’s earnings release revealed that fourth-quarter bookings fell slightly short of Wall Street estimates, leading Bank of America analysts to express concern about the travel firm’s growth prospects in the first quarter of 2024. The analysts downgraded Expedia stock to a neutral rating and lowered their price target from $181 to $156, emphasizing that the company will face several challenges in the first half of the year.

Ariane Gorin to Assume the Role of CEO

Expedia, in a separate news release, announced that Ariane Gorin, the current president of Expedia for business, will take over as chief executive officer starting May 13. This leadership change comes at a critical time for the company as it works to address the challenges outlined by analysts and sustain its growth in the highly competitive travel industry.

Expedia’s Earnings Growth Surpasses Estimates

Analysts had expected Expedia’s earnings to reach $1.67 per share, reflecting a 33% year-over-year increase. Additionally, FactSet projected the company’s revenue to climb 9.7% to $2.873 billion. During the crucial holiday quarter, Wall Street predicted bookings would grow by 7.2% to $21.997 billion.

The company, however, managed to exceed these estimates, reporting earnings of $1.72 per share, representing a 37% increase that accelerated from the 33.6% gain in the previous quarter. Revenue also rose by 10% to $2.887 billion, while gross bookings grew 6% to $21.672 billion.

Expedia Stock Takes a Dive

Following the earnings announcement, shares of Expedia experienced a sharp decline of 17.8%, dropping to $131.11 on Friday. The stock price fell below the 50-day moving average in heavy trading volume. In contrast, the stock had shown a rise of 3.3% to $159.47 in Thursday’s stock market trading.

Similar to Expedia, Booking.com, another player in the online travel and booking industry, is also being monitored on the IBD Leaderboard watchlist. While Booking.com’s stock reached a record high with a 3.5% increase on Thursday, it fell 2.1% on Friday, though still remaining comfortably above the 50-day line.

Expedia experienced a noteworthy rebound in demand for travel throughout the past year. The stock had faced considerable challenges in 2022 due to various factors including the omicron variant of the coronavirus, the Ukraine war, and inflation.

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