Expedia Group (EXPE) shares declined in extended trading Thursday, despite the online travel giant issuing a 2026 financial outlook that exceeded Wall Street's expectations. The stock retreated approximately 2.6% to $227.24 in late after-hours action, following a highly volatile regular session that saw the price swing between a low of $208.05 and a high of $246.66.
Strong Long-Term Targets Amid Market Skepticism
Expedia provided specific financial guidance for 2026, projecting gross bookings—the total value of travel services reserved across its platforms—in a range of $127 billion to $129 billion. The company anticipates revenue for that year to land between $15.6 billion and $16.0 billion. Both projections surpassed the consensus analyst forecasts, which, according to LSEG data, stood at $125.95 billion for gross bookings and $15.69 billion for revenue.
This forward-looking disclosure arrives at a critical juncture for the travel sector, as investors meticulously scrutinize earnings reports for signals of whether consumer and business travel demand is plateauing or merely changing in composition. The market's reaction suggests that even an above-consensus long-term forecast was insufficient to overcome broader investor caution on the day.
Fourth-Quarter Performance and Capital Returns
For the final quarter of 2025, Expedia reported revenue of $3.547 billion, an increase of 11% year-over-year. Adjusted earnings reached $3.78 per share. A notable highlight was the performance of its business-to-business (B2B) division, which saw gross bookings surge 24%. This significantly outpaced the 5% growth in its direct-to-consumer segment, underscoring the company's strategic pivot toward serving travel partners like airlines and agencies.
In a move to return capital to shareholders, Expedia's board declared a quarterly cash dividend of $0.48 per share. This dividend is payable on March 26 to shareholders of record as of March 5. Additionally, the company disclosed it repurchased approximately 9 million of its own shares during 2025, at a total cost of $1.7 billion.
Diverging Fortunes in the Travel Sector
The after-hours trading session revealed a split within the travel industry. While Expedia shares dipped, rival Airbnb (ABNB) saw its stock rise roughly 5%. Airbnb's gain followed its own positive first-quarter revenue forecast, which pointed to strength in premium bookings even as demand from more budget-conscious travelers shows signs of moderating.
This divergence highlights how investors are differentiating between business models and specific company guidance within the broader sector, rather than treating travel stocks as a monolithic group.
Broader Market Headwinds and Key Catalysts
The trading backdrop on Thursday was challenging for growth-oriented stocks. Major indices sold off, with the Nasdaq Composite falling about 2% and the S&P 500 declining 1.6%. This risk-off sentiment was driven in part by investor positioning ahead of the crucial January U.S. Consumer Price Index (CPI) report, scheduled for release on Friday. Market participants are keenly awaiting this data for clues on the future path of inflation and interest rates.
Analysts note that in such an environment, even positive company-specific news can be temporarily overshadowed by macro concerns. Expedia's stock exhibited the characteristics of a risk asset during the session, with pronounced intraday volatility and late-session selling pressure.
Looking ahead, key focal points for Expedia investors will include the sustainability of the robust growth in its partner-driven B2B segment as a counterbalance to more modest consumer channel gains. Market watchers will also assess whether the company can maintain margin improvements while continuing to invest in marketing and product development.
The travel industry remains sensitive to economic shifts. Persistent inflation or a pullback in consumer spending could quickly dampen demand. Furthermore, Expedia operates in a competitive landscape, facing constant pressure from other online travel agencies and suppliers aiming to capture bookings directly. The immediate market-wide catalyst will be Friday's inflation data, while for Expedia specifically, traders will monitor early 2026 booking trends against the company's first-quarter guidance of $34.6 billion to $35.2 billion in gross bookings and $3.32 billion to $3.37 billion in revenue.
