Expedia Group shares closed down 6.6% at $212.67 on Friday, as the market reacted negatively to the online travel giant's tempered margin guidance for the full year. The decline came despite the company reporting robust quarterly performance and announcing a more optimistic revenue forecast for 2026.
Strong Results Overshadowed by Guidance
The company delivered a solid fourth quarter, with gross bookings rising 11% to $27.0 billion and revenue reaching $3.55 billion. Adjusted earnings came in at $3.78 per share. Looking forward, Expedia projected 2026 gross bookings between $127 billion and $129 billion, with revenue expected in the range of $15.6 billion to $16.0 billion.
In a move to return capital to shareholders, the board approved a 20% increase in the quarterly dividend to $0.48 per share, payable on March 26 to shareholders of record as of March 5. "We delivered a strong finish to a great year and expect our positive momentum to continue in 2026," said CEO Ariane Gorin.
Market Focus on Profitability
Investors, however, zeroed in on management's cautious tone regarding profit margins. The company cited macroeconomic uncertainty and uneven consumer spending as goods prices rise and U.S. trade policy evolves. Finance chief Scott Schenkel indicated that a first-quarter margin boost would depend on one-time items and cost-cutting measures.
This focus on near-term profitability pressures triggered a swift reaction from Wall Street. Analysts at Piper Sandler, TD Cowen, and Cantor Fitzgerald all reduced their price targets for the stock, with several maintaining neutral or hold ratings. Cantor Fitzgerald specifically highlighted uncertainty around how online travel platforms will adapt to AI-driven disruptions in search and booking.
Key Factors for the Road Ahead
When U.S. markets reopen on Tuesday following the Presidents Day holiday, investors will be watching to see if the stock stabilizes. Key points of focus will be management's ability to sustain margin improvements beyond temporary factors and any commentary on controlling costs, particularly in marketing and technology.
The primary risk for Expedia remains a potential consumer shift toward cheaper travel options or an over-reliance on promotional inventory, which could pressure margins as the company moves through 2026. The stock remains significantly below its 52-week high of $303.80, leaving room for debate over its valuation relative to future execution.
