EXPE
Expedia Group, Inc.
$259.94
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 45.4% below fair value
You pay
$259.94
Bear
$341.94
Fair
$475.72
Bull
$611.25
Bear
$341.94
+31.5%
7% stage 1 growth, 11% discount
Fair
$475.72
+83.0%
11% stage 1 growth, 11% discount
Bull
$611.25
+135.1%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
10.4x
Market is pricing in (growth)
-0.0%
vs 11.2% base
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 $271.93 from 76 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $475.72 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 $271.93 (from 76 analysts). Our estimate is 115% 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