Jim Cramer Says “Expedia Seems to Have a Clear Focus on its Mission”

Expedia Group, Inc. (NASDAQ:EXPE) is one of the stocks on Jim Cramer’s radar. Cramer discussed the company’s earnings during the episode and said:

“So, how about Expedia Group? They too had very strong numbers for the second quarter… Now, unlike Airbnb, though, Expedia gave unambiguously robust guidance for the current quarter. Management also raised their full-year forecast for gross bookings and revenue growth… Expedia, on the other hand, gave us outright beat and raise quarter and talked about stronger than expected margin expansion going forward… After going through both reports, there are a couple things that I think really explain why Expedia is suddenly liked while Airbnb is very much disliked after those results.

First, Expedia is an online travel agency. It’s got this B2B… division… That’s really important because Expedia’s business-to-business division is the best part of the company right now. In the second quarter, their B2B unit saw gross bookings growth of 17% year over year and revenue growth of 15%. The larger business-to-consumer division, on the other hand, had just 1% gross bookings growth and 2% revenue growth. In other words, business-to-business accounted for almost all of Expedia’s growth… The strength in business-to-business is also what gave Expedia the confidence to issue better than expected guidance for the third quarter, and raise its full year forecast…

What else? I’d say that at least right now, Expedia seems to have a clear focus on its mission…

Expedia is the place where people go to compare prices and find their best value for their travel options, their flights, their hotels, their rental cars…  Expedia, on the other hand, is simply focused on execution, and that’s working as consumers keep coming to their platform to get the best prices when they want to travel…

So let me give you the bottom line of this very complex story: There’s a reason why Airbnb stock tumbled after earnings while Expedia soared the very next day. Expedia had a pure beat and raise with very little hair on it, while Airbnb had a beat, but also gave investors some reasons to worry about its guidance. Plus, Expedia’s got an advantage with much more business-to-business exposure than… [Airbnb]. At the end of the day, I think Expedia’s thriving because of its laser focus on value, while Airbnb is making a bunch of big bets that may or may not pay off in this environment. I say stick with what’s working. I say stick with Expedia.”

Photo by Yiorgos Ntrahas on Unsplash

Expedia Group, Inc. (NASDAQ:EXPE) operates an online travel platform and provides lodging, transportation, and vacation rentals through brands like Expedia, Hotels.com, and Vrbo.

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Disclosure: None. This article is originally published at Insider Monkey.