Analysts cite flat ARPB and high marketing costs for Expedia sell rating

StockStory analysts advise selling Expedia Group shares, citing stagnant average revenue per booking and high customer acquisition costs. The company's stock trades at $300.74 per share, a level that has tracked the broader market closely, with a 9.8% gain over the last six months compared to an 8.9% return for the S&P 500.

The primary concern is Expedia's average revenue per booking (ARPB), a metric that measures both user booking volume and commission rates. This figure has remained roughly flat over the past two years. While the flat ARPB is not ideal, analysts note that the increase in room nights booked is more relevant for assessing long-term business potential. However, if Expedia attempts to boost ARPB through more aggressive monetization strategies, it remains unclear whether bookings can continue growing at their current pace.

Revenue projections from Wall Street analysts also signal a slowdown in growth. Sell-side estimates project Expedia's revenue to rise by 6.3% over the next 12 months. This represents a slight deceleration from the company's 8.6% annualized growth rate over the past three years. This projection implies that demand for the company's products and services may face headwinds.

Unlike enterprise software companies that rely on dedicated sales teams, consumer internet businesses like Expedia depend on product virality, paid advertising, and incentives to grow. Acquiring new users has become expensive for Expedia, which spent 60.3% of its gross profit on sales and marketing expenses over the last year. This inefficiency suggests a highly competitive environment with little differentiation between Expedia and its peers.

Despite these concerns, the stock currently trades at 7.9 times forward EV/EBITDA. While analysts consider this valuation reasonable, they argue that the company's shakier fundamentals present too much downside risk. As a result, they suggest investors look elsewhere for opportunities, specifically pointing toward a dominant aerospace business with a proven merger and acquisition strategy.

StockStory notes that its platform previously identified stocks such as Nvidia, which gained 1,460% between June 2020 and June 2025, and Kadant, which rose 214% over the same period. The firm encourages investors to use its AI platform to find similar market-beating stocks.