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Is Expedia (EXPE) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Expedia (EXPE). EXPE is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 17.66. This compares to its industry's average Forward P/E of 41.11. Over the past year, EXPE's Forward P/E has been as high as 24.54 and as low as 15.44, with a median of 17.62.

Investors will also notice that EXPE has a PEG ratio of 1.44. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EXPE's industry currently sports an average PEG of 1.91. EXPE's PEG has been as high as 1.67 and as low as 0.99, with a median of 1.26, all within the past year.

Another notable valuation metric for EXPE is its P/B ratio of 3.50. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. EXPE's current P/B looks attractive when compared to its industry's average P/B of 4.11. Within the past 52 weeks, EXPE's P/B has been as high as 3.71 and as low as 2.75, with a median of 3.21.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. EXPE has a P/S ratio of 1.77. This compares to its industry's average P/S of 1.93.

Finally, investors should note that EXPE has a P/CF ratio of 11.48. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 32.51. Over the past 52 weeks, EXPE's P/CF has been as high as 14.73 and as low as 9.68, with a median of 11.01.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Expedia is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EXPE feels like a great value stock at the moment.


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