Cantor Fitzgerald Remains Bullish On Expedia Following Solid Growth In July And August

In a research note released today, Cantor Fitzgerald analyst Naved Khan maintained a Buy rating on Expedia (NASDAQ:EXPE) with a $92 price target, following solid growth for paid clicks to Expedia in July and August.

Khan wrote, “U.S. paid-click data (from comScore) shows click volume to sites (~50% of total revenues) up 4% Y/Y in July/Aug. While this represents a sharp slowdown vs. triple-digit growth in prior quarters (200% in 2Q, 150% in 1Q), we note that the Y/Y comp was 280%-point tougher for July/Aug vs 2Q:14, likely reflecting the hit from TripAdvisor meta-search switch last year, when Expedia likely ramped-up spending on paid search. Normalizing for the tough Y/Y comp, growth in’s paid- click appears to be consistent with trends in prior quarters. We view the elevated level of paid click activity (normalized) to be indicative of higher ad spending on Google’s paid search to capitalize on an improved traffic conversion/ROI.”

Khan added, “As of 2Q:14, ~59K hotels were offering ETP (vs. ~51K in 1Q:14 and ~45K in 4Q:13), and we expect Expedia to continue to roll it out to a broader set. Given the meaningful lift in room nights growth at participating hotels, we believe that further rollout of ETP will continue to positively impact EXPE’s room nights growth as well.”

According to which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Naved Khan has a total average return of 24.9% and a 75% success rate. Khan has a 16% average return when recommending EXPE, and is ranked #164 out of 3311 analysts.


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