Intrinsic value of Expedia - EXPE

Previous Close

$143.71

  Intrinsic Value

$363.66

stock screener

  Rating & Target

str. buy

+153%

  Value-price divergence*

+217%

Previous close

$143.71

 
Intrinsic value

$363.66

 
Up/down potential

+153%

 
Rating

str. buy

 
Value-price divergence*

+217%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of EXPE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 21.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  31.50
  15.00
  14.00
  13.10
  12.29
  11.56
  10.90
  10.31
  9.78
  9.30
  8.87
  8.49
  8.14
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
  6.50
  6.35
  6.22
  6.09
  5.98
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
Revenue, $m
  8,774
  10,090
  11,503
  13,010
  14,608
  16,297
  18,075
  19,939
  21,889
  23,926
  26,049
  28,260
  30,560
  32,951
  35,436
  38,019
  40,702
  43,492
  46,392
  49,408
  52,545
  55,812
  59,213
  62,757
  66,451
  70,303
  74,323
  78,519
  82,902
  87,481
  92,267
Variable operating expenses, $m
 
  8,579
  9,668
  10,831
  12,064
  13,367
  14,738
  16,177
  17,682
  19,253
  20,891
  21,802
  23,577
  25,421
  27,338
  29,331
  31,401
  33,553
  35,790
  38,117
  40,538
  43,058
  45,682
  48,416
  51,265
  54,238
  57,339
  60,576
  63,957
  67,490
  71,182
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  8,324
  8,579
  9,668
  10,831
  12,064
  13,367
  14,738
  16,177
  17,682
  19,253
  20,891
  21,802
  23,577
  25,421
  27,338
  29,331
  31,401
  33,553
  35,790
  38,117
  40,538
  43,058
  45,682
  48,416
  51,265
  54,238
  57,339
  60,576
  63,957
  67,490
  71,182
Operating income, $m
  450
  1,512
  1,834
  2,179
  2,544
  2,930
  3,336
  3,762
  4,208
  4,673
  5,159
  6,458
  6,983
  7,530
  8,098
  8,688
  9,301
  9,939
  10,601
  11,290
  12,008
  12,754
  13,531
  14,341
  15,185
  16,065
  16,984
  17,943
  18,945
  19,991
  21,085
EBITDA, $m
  1,244
  2,603
  2,967
  3,356
  3,769
  4,204
  4,663
  5,144
  5,647
  6,172
  6,720
  7,291
  7,884
  8,501
  9,142
  9,808
  10,500
  11,220
  11,968
  12,746
  13,556
  14,398
  15,276
  16,190
  17,143
  18,137
  19,174
  20,256
  21,387
  22,568
  23,803
Interest expense (income), $m
  154
  155
  240
  332
  430
  534
  643
  759
  880
  1,007
  1,139
  1,277
  1,421
  1,570
  1,726
  1,887
  2,055
  2,230
  2,411
  2,599
  2,796
  2,999
  3,212
  3,433
  3,663
  3,903
  4,154
  4,415
  4,688
  4,973
  5,270
Earnings before tax, $m
  277
  1,357
  1,594
  1,847
  2,114
  2,396
  2,693
  3,003
  3,328
  3,666
  4,019
  5,181
  5,562
  5,959
  6,372
  6,801
  7,246
  7,709
  8,190
  8,691
  9,212
  9,754
  10,319
  10,908
  11,522
  12,162
  12,830
  13,528
  14,257
  15,018
  15,814
Tax expense, $m
  16
  366
  430
  499
  571
  647
  727
  811
  898
  990
  1,085
  1,399
  1,502
  1,609
  1,720
  1,836
  1,956
  2,081
  2,211
  2,347
  2,487
  2,634
  2,786
  2,945
  3,111
  3,284
  3,464
  3,653
  3,849
  4,055
  4,270
Net income, $m
  282
  990
  1,164
  1,348
  1,543
  1,749
  1,966
  2,192
  2,429
  2,676
  2,934
  3,782
  4,061
  4,350
  4,651
  4,964
  5,290
  5,628
  5,979
  6,344
  6,725
  7,121
  7,533
  7,963
  8,411
  8,878
  9,366
  9,876
  10,407
  10,963
  11,545

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,869
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  15,778
  15,991
  18,229
  20,617
  23,151
  25,828
  28,644
  31,599
  34,690
  37,918
  41,283
  44,786
  48,431
  52,220
  56,159
  60,252
  64,505
  68,925
  73,521
  78,300
  83,273
  88,449
  93,840
  99,456
  105,310
  111,415
  117,786
  124,436
  131,382
  138,638
  146,223
Adjusted assets (=assets-cash), $m
  13,909
  15,991
  18,229
  20,617
  23,151
  25,828
  28,644
  31,599
  34,690
  37,918
  41,283
  44,786
  48,431
  52,220
  56,159
  60,252
  64,505
  68,925
  73,521
  78,300
  83,273
  88,449
  93,840
  99,456
  105,310
  111,415
  117,786
  124,436
  131,382
  138,638
  146,223
Revenue / Adjusted assets
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
  0.631
Average production assets, $m
  3,850
  4,430
  5,050
  5,711
  6,413
  7,155
  7,935
  8,753
  9,609
  10,504
  11,436
  12,406
  13,416
  14,466
  15,557
  16,690
  17,868
  19,093
  20,366
  21,690
  23,067
  24,501
  25,994
  27,550
  29,172
  30,863
  32,628
  34,470
  36,394
  38,404
  40,505
Working capital, $m
  -2,677
  -1,009
  -1,150
  -1,301
  -1,461
  -1,630
  -1,807
  -1,994
  -2,189
  -2,393
  -2,605
  -2,826
  -3,056
  -3,295
  -3,544
  -3,802
  -4,070
  -4,349
  -4,639
  -4,941
  -5,255
  -5,581
  -5,921
  -6,276
  -6,645
  -7,030
  -7,432
  -7,852
  -8,290
  -8,748
  -9,227
Total debt, $m
  3,160
  4,898
  6,772
  8,771
  10,892
  13,132
  15,489
  17,962
  20,550
  23,251
  26,068
  29,000
  32,051
  35,223
  38,519
  41,945
  45,504
  49,204
  53,051
  57,052
  61,214
  65,546
  70,058
  74,758
  79,658
  84,769
  90,101
  95,667
  101,481
  107,554
  113,903
Total liabilities, $m
  11,645
  13,384
  15,258
  17,257
  19,378
  21,618
  23,975
  26,448
  29,036
  31,737
  34,554
  37,486
  40,537
  43,709
  47,005
  50,431
  53,990
  57,690
  61,537
  65,538
  69,700
  74,032
  78,544
  83,244
  88,144
  93,255
  98,587
  104,153
  109,967
  116,040
  122,389
Total equity, $m
  4,132
  2,606
  2,971
  3,361
  3,774
  4,210
  4,669
  5,151
  5,654
  6,181
  6,729
  7,300
  7,894
  8,512
  9,154
  9,821
  10,514
  11,235
  11,984
  12,763
  13,574
  14,417
  15,296
  16,211
  17,166
  18,161
  19,199
  20,283
  21,415
  22,598
  23,834
Total liabilities and equity, $m
  15,777
  15,990
  18,229
  20,618
  23,152
  25,828
  28,644
  31,599
  34,690
  37,918
  41,283
  44,786
  48,431
  52,221
  56,159
  60,252
  64,504
  68,925
  73,521
  78,301
  83,274
  88,449
  93,840
  99,455
  105,310
  111,416
  117,786
  124,436
  131,382
  138,638
  146,223
Debt-to-equity ratio
  0.765
  1.880
  2.280
  2.610
  2.890
  3.120
  3.320
  3.490
  3.630
  3.760
  3.870
  3.970
  4.060
  4.140
  4.210
  4.270
  4.330
  4.380
  4.430
  4.470
  4.510
  4.550
  4.580
  4.610
  4.640
  4.670
  4.690
  4.720
  4.740
  4.760
  4.780
Adjusted equity ratio
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163
  0.163

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  282
  990
  1,164
  1,348
  1,543
  1,749
  1,966
  2,192
  2,429
  2,676
  2,934
  3,782
  4,061
  4,350
  4,651
  4,964
  5,290
  5,628
  5,979
  6,344
  6,725
  7,121
  7,533
  7,963
  8,411
  8,878
  9,366
  9,876
  10,407
  10,963
  11,545
Depreciation, amort., depletion, $m
  794
  1,091
  1,133
  1,178
  1,225
  1,274
  1,327
  1,382
  1,439
  1,499
  1,562
  833
  900
  971
  1,044
  1,120
  1,199
  1,281
  1,367
  1,456
  1,548
  1,644
  1,745
  1,849
  1,958
  2,071
  2,190
  2,313
  2,443
  2,577
  2,718
Funds from operations, $m
  1,733
  2,082
  2,297
  2,526
  2,768
  3,024
  3,292
  3,574
  3,868
  4,176
  4,496
  4,614
  4,961
  5,321
  5,696
  6,085
  6,489
  6,909
  7,346
  7,800
  8,273
  8,765
  9,278
  9,812
  10,369
  10,950
  11,556
  12,189
  12,850
  13,541
  14,263
Change in working capital, $m
  169
  -132
  -141
  -151
  -160
  -169
  -178
  -186
  -195
  -204
  -212
  -221
  -230
  -239
  -249
  -258
  -268
  -279
  -290
  -302
  -314
  -327
  -340
  -354
  -369
  -385
  -402
  -420
  -438
  -458
  -479
Cash from operations, $m
  1,564
  2,214
  2,438
  2,676
  2,928
  3,193
  3,470
  3,760
  4,063
  4,379
  4,708
  4,836
  5,191
  5,560
  5,944
  6,343
  6,757
  7,188
  7,636
  8,102
  8,587
  9,092
  9,618
  10,166
  10,738
  11,335
  11,958
  12,609
  13,288
  13,999
  14,742
Maintenance CAPEX, $m
  0
  -258
  -297
  -339
  -383
  -430
  -480
  -533
  -587
  -645
  -705
  -767
  -833
  -900
  -971
  -1,044
  -1,120
  -1,199
  -1,281
  -1,367
  -1,456
  -1,548
  -1,644
  -1,745
  -1,849
  -1,958
  -2,071
  -2,190
  -2,313
  -2,443
  -2,577
New CAPEX, $m
  -749
  -580
  -620
  -662
  -702
  -741
  -780
  -818
  -856
  -894
  -932
  -971
  -1,010
  -1,050
  -1,091
  -1,134
  -1,178
  -1,225
  -1,273
  -1,324
  -1,377
  -1,434
  -1,493
  -1,556
  -1,622
  -1,691
  -1,765
  -1,842
  -1,924
  -2,010
  -2,101
Cash from investing activities, $m
  -718
  -838
  -917
  -1,001
  -1,085
  -1,171
  -1,260
  -1,351
  -1,443
  -1,539
  -1,637
  -1,738
  -1,843
  -1,950
  -2,062
  -2,178
  -2,298
  -2,424
  -2,554
  -2,691
  -2,833
  -2,982
  -3,137
  -3,301
  -3,471
  -3,649
  -3,836
  -4,032
  -4,237
  -4,453
  -4,678
Free cash flow, $m
  846
  1,376
  1,521
  1,676
  1,843
  2,021
  2,210
  2,409
  2,620
  2,840
  3,071
  3,098
  3,349
  3,610
  3,882
  4,165
  4,459
  4,764
  5,081
  5,411
  5,754
  6,110
  6,480
  6,866
  7,268
  7,686
  8,122
  8,577
  9,051
  9,546
  10,063
Issuance/(repayment) of debt, $m
  -404
  1,738
  1,874
  1,999
  2,121
  2,240
  2,357
  2,473
  2,587
  2,702
  2,816
  2,932
  3,051
  3,172
  3,296
  3,426
  3,560
  3,700
  3,847
  4,000
  4,162
  4,332
  4,512
  4,701
  4,900
  5,110
  5,332
  5,566
  5,813
  6,074
  6,349
Issuance/(repurchase) of shares, $m
  -315
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -541
  1,738
  1,874
  1,999
  2,121
  2,240
  2,357
  2,473
  2,587
  2,702
  2,816
  2,932
  3,051
  3,172
  3,296
  3,426
  3,560
  3,700
  3,847
  4,000
  4,162
  4,332
  4,512
  4,701
  4,900
  5,110
  5,332
  5,566
  5,813
  6,074
  6,349
Total cash flow (excl. dividends), $m
  271
  3,114
  3,395
  3,675
  3,964
  4,261
  4,567
  4,882
  5,207
  5,542
  5,887
  6,030
  6,399
  6,782
  7,179
  7,591
  8,019
  8,464
  8,928
  9,411
  9,916
  10,442
  10,992
  11,567
  12,168
  12,796
  13,454
  14,143
  14,864
  15,620
  16,412
Retained Cash Flow (-), $m
  732
  -343
  -365
  -389
  -413
  -436
  -459
  -482
  -504
  -526
  -548
  -571
  -594
  -618
  -642
  -667
  -693
  -721
  -749
  -779
  -811
  -844
  -879
  -915
  -954
  -995
  -1,038
  -1,084
  -1,132
  -1,183
  -1,236
Prev. year cash balance distribution, $m
 
  1,869
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  4,639
  3,030
  3,286
  3,551
  3,825
  4,108
  4,401
  4,703
  5,016
  5,339
  5,459
  5,805
  6,164
  6,537
  6,923
  7,325
  7,744
  8,179
  8,632
  9,105
  9,598
  10,113
  10,651
  11,213
  11,801
  12,416
  13,059
  13,732
  14,437
  15,175
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  4,448
  2,774
  2,859
  2,924
  2,965
  2,981
  2,973
  2,940
  2,881
  2,799
  2,592
  2,477
  2,344
  2,194
  2,033
  1,862
  1,685
  1,506
  1,329
  1,157
  993
  839
  698
  571
  459
  362
  280
  212
  158
  114
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Expedia, Inc., together with its subsidiaries, operates as an online travel company in the United States and internationally. The company operates through four segments: Core OTA, Trivago, Egencia, and HomeAway. It facilitates the booking of hotel rooms, airline seats, car rentals, and destination services from its travel suppliers; and acts as an agent in the transactions. The company serves leisure and corporate travelers, offline retail travel agents, and travel service providers through Expedia.com, Hotels.com, Hotwire.com, Wotif.com, Wotif.co.nz, lastminute.com.au, lastminute.com.nz, travel.com.au, CarRentals.com, and Orbitz.com Websites; and Travelocity, HomeAway, Egencia, trivago, Classic Vacations, Expedia Local Expert, and Expedia CruiseShipCenters brands, as well as Expedia Affiliate Network. It also engages in advertising and media business. The company was founded in 1996 and is headquartered in Bellevue, Washington.

FINANCIAL RATIOS  of  Expedia (EXPE)

Valuation Ratios
P/E Ratio 76.5
Price to Sales 2.5
Price to Book 5.2
Price to Tangible Book
Price to Cash Flow 13.8
Price to Free Cash Flow 26.5
Growth Rates
Sales Growth Rate 31.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -4.8%
Cap. Spend. - 3 Yr. Gr. Rate 19.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 76.5%
Total Debt to Equity 76.5%
Interest Coverage 3
Management Effectiveness
Return On Assets 2.7%
Ret/ On Assets - 3 Yr. Avg. 5.1%
Return On Total Capital 3.7%
Ret/ On T. Cap. - 3 Yr. Avg. 9.5%
Return On Equity 6.3%
Return On Equity - 3 Yr. Avg. 16.5%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 81.8%
Gross Margin - 3 Yr. Avg. 80.6%
EBITDA Margin 14%
EBITDA Margin - 3 Yr. Avg. 17.5%
Operating Margin 5.1%
Oper. Margin - 3 Yr. Avg. 9.3%
Pre-Tax Margin 3.2%
Pre-Tax Margin - 3 Yr. Avg. 8.4%
Net Profit Margin 3.2%
Net Profit Margin - 3 Yr. Avg. 7.2%
Effective Tax Rate 5.8%
Eff/ Tax Rate - 3 Yr. Avg. 15.8%
Payout Ratio 53.2%

EXPE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EXPE stock intrinsic value calculation we used $8774 million for the last fiscal year's total revenue generated by Expedia. The default revenue input number comes from 2016 income statement of Expedia. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our EXPE stock valuation model: a) initial revenue growth rate of 15% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for EXPE is calculated based on our internal credit rating of Expedia, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Expedia.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of EXPE stock the variable cost ratio is equal to 86.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for EXPE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.9% for Expedia.

Corporate tax rate of 27% is the nominal tax rate for Expedia. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the EXPE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for EXPE are equal to 43.9%.

Life of production assets of 14.9 years is the average useful life of capital assets used in Expedia operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for EXPE is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4132 million for Expedia - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 150.27 million for Expedia is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Expedia at the current share price and the inputted number of shares is $21.6 billion.

RELATED COMPANIES Price Int.Val. Rating
PCLN Priceline Grou 1,810.00 1,469.07  sell
CTRP Ctrip.com Inte 50.44 232.97  str.buy
TRIP TripAdvisor 39.92 31.65  hold
TZOO Travelzoo 8.55 6.56  sell
SABR Sabre 17.40 20.80  hold
LTRPA Liberty TripAd 11.75 34.58  str.buy

COMPANY NEWS

▶ [$$] Henry Ellenbogen's Bet on the Future Pays Off Today   [Aug-19-17 12:33AM  Barrons.com]
▶ ETFs with exposure to Expedia, Inc. : August 15, 2017   [Aug-15-17 04:09PM  Capital Cube]
▶ [$$] Expedia, IAC, EBay: Best Online Stocks   [Aug-14-17 11:16AM  Barrons.com]
▶ One Online Travel And Two Ecommerce Stocks To Buy   [Aug-11-17 02:48PM  Barrons.com]
▶ Online Travel: Buy Priceline Over TripAdvisor   [Aug-08-17 03:47PM  Barrons.com]
▶ Priceline Valuation: Whats Priced In?   [Aug-04-17 10:36AM  Market Realist]
▶ Expedia Half-Off Travel Sale Starts Friday, August 4   [Aug-02-17 12:27PM  PR Newswire]
▶ [$$] Priceline Group EPS Seen Surging   [05:26AM  Barrons.com]
▶ Expedia Q2 Results: Flying Into High Season   [Jul-31-17 10:45AM  Motley Fool]
▶ Company News For July 31, 2017   [10:25AM  Zacks]
▶ How Home Rentals are Giving Expedia Extra Comfort   [Jul-28-17 04:28PM  Barrons.com]
▶ Breaking cigarettes in the blitz   [01:41PM  CNBC Videos]
▶ Expedia misses 2Q profit forecasts   [10:12PM  Associated Press]
▶ Expedia Second-Quarter Earnings A Miss, Revenue Beats   [04:30PM  Investor's Business Daily]
▶ Expedia beats on top line   [04:06PM  CNBC Videos]
▶ 4 Big Earnings You Can't Miss Thursday: Investing Action Plan   [Jul-26-17 04:15PM  Investor's Business Daily]
▶ Priceline, Expedia boost home-rental inventory as race with Airbnb heats up   [Jul-25-17 11:10PM  American City Business Journals]
▶ This Chinese Travel Stock May Be Packing Up For A New Breakout   [02:50AM  Investor's Business Daily]
▶ [$$] Expedia, Priceline Home In on Airbnbs Turf   [12:57AM  The Wall Street Journal]
▶ [$$] Expedia, Priceline Home In on Airbnb's Turf   [06:14AM  The Wall Street Journal]
▶ Who Are Expedia's Major Shareholders?   [Jul-23-17 08:07PM  Motley Fool]
▶ Diller Says He Offered to Back Dimon in a White House Run   [Jul-18-17 03:21PM  Bloomberg Video]
▶ [$$] Will the death of US retail be the next big short?   [Jul-16-17 12:20PM  Financial Times]
▶ [$$] Barron's First-Half Grades for Stock-Picking Are In   [Jul-15-17 12:38AM  Barrons.com]
▶ Can Expedia Ever Catch Up to Priceline Group?   [Jul-14-17 09:11AM  Motley Fool]
▶ Expedia CEO Says Regulatory Landscape More Uncertain   [Jul-12-17 04:02PM  Bloomberg Video]
▶ Hotels Are Paying Up for Your Loyalty   [Jul-07-17 02:01PM  Barrons.com]
▶ Priceline, Expedia Global Travel Empire Still Faces Hurdles, Threats   [Jun-30-17 06:15AM  Investor's Business Daily]
▶ Nvidia, Goldman Sachs Get PT Hikes; Expedia Is A Buy   [Jun-28-17 04:04PM  Investor's Business Daily]
▶ Will Hyatt Really Leave Expedia?   [Jun-26-17 08:40PM  Morningstar]
▶ These stocks are trading at extremes   [Jun-23-17 05:00PM  CNBC Videos]
Stock chart of EXPE Financial statements of EXPE
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.