Home Mutual Funds Expedia Stock Drops After Mixed Q4 Results, Announcement of CEO Change—Key Level to Watch

Expedia Stock Drops After Mixed Q4 Results, Announcement of CEO Change—Key Level to Watch

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Key Takeaways

  • Expedia shares tumbled despite topping quarterly earnings and sales expectations as bookings came in worse than expected and the company announced the appointment of a new CEO.
  • Incoming CEO Ariane Gorin has most recently served as president of the company’s B2B arm—Expedia for Business.
  • The Expedia share price is likely to find key support around $133 from a multi-month horizontal trendline and the 200-day moving average.

Expedia Group, Inc.

Source: TradingView.com.

Expedia late Thursday (EXPE) released quarterly earnings that topped Wall Street expectations and bookings that fell short of forecasts, and also surprised investors by announcing the appointment of a new chief executive officer (CEO). Shares in the travel giant fell 13% in extended-hours trading.

The pioneer online travel company posted fourth-quarter adjusted earnings of $242 million, or $1.72 per share, compared to analysts’ consensus estimate of $1.68 a share. Revenue of $2.89 billion in the period increased 10% from the prior year and came in ahead of the $2.88 billion Street view. Gross bookings for the quarter grew 6% to $21.67 billion, falling slightly short of the $22 billion analysts had expected.

In a separate statement released Thursday evening, the company said CEO Peter Kern had resigned from the role and will be replaced by company insider Ariane Gorin, who will take the helm on May 13. Gorin, who has been with Expedia for more than a decade, most recently as president of the company’s business-to-business (B2B) arm—Expedia for Business—will also assume a seat on the board of directors.

“We very much wanted an internal candidate to succeed to the CEO position, and following a comprehensive search, the Board determined Ariane was the best candidate given her exemplary leadership,” said Expedia chairman Barry Diller. The company said Kern will continue to serve as Expedia’s vice chairman and member of the board, working closely with Gorin to facilitate a smooth transition.

Since closing back above the 200-day moving average in early November, the EXPE share price trended sharply higher for several months before consolidating throughout most of January. An expected fall below the 50-day moving average risks shifting investor sentiment from the bulls camp to bears camp, potentially sparking a trend reversal. It’s worth keeping a close eye on the $122 level—an area on the chart likely to encounter support from a multi-month horizontal line and the 200-day moving average. 

Expedia shares were down 13% at $138.68 in after-hours trading.

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As of the date this article was written, the author does not own any of the above securities.

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