EXPE
Expedia Group, Inc.
$280.87
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 51.4% below fair value
You pay
$280.87
Bear
$412.65
Fair
$577.74
Bull
$746.54
Bear
$412.65
+46.9%
7% stage 1 growth, 12% discount
Fair
$577.74
+105.7%
12% stage 1 growth, 12% discount
Bull
$746.54
+165.8%
15% stage 1 growth, 12% discount
Adjust Assumptions
11.8%
12.0%
3.0%
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
36%
Implied Market Multiple
10.3x
Market is pricing in (growth)
1.5%
vs 11.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (76 analysts)
$336.24
Divergence from AlphaVal
72%
Summary
Using a two-stage FCF DCF with 12% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $577.74 per share.
Warnings
Stock-based employee pay equals 31% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $336.24 (from 76 analysts). Our estimate is 72% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions