EXPE
Expedia Group, Inc.
$214.65
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 54.9% below fair value
You pay
$214.65
Bear
$342.12
Fair
$476.42
Bull
$612.59
Bear
$342.12
+59.4%
7% stage 1 growth, 11% discount
Fair
$476.42
+122.0%
11% stage 1 growth, 11% discount
Bull
$612.59
+185.4%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
8.5x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $271.47 from 75 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $476.42 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 $271.47 (from 75 analysts). Our estimate is 116% 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