Shares of Expedia Group (NYSE: EXPE) dropped in the final days of the last week following the release of the company’s quarterly earnings report. On the other hand, Airbnb stock price trades near the record highs in the anticipation of their quarterly results on Feb. 25.
Fundamental analysis: Pandemic continues to weigh on earnings
The travel shopping company reported a 67% drop in revenue to $920 million in the holiday quarter, missing analysts’ expected revenue of more than $1 billion. Expedia posted an EPS loss of $2.64 compared to the expected $1.94.
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However, the company registered a significant recovery after its stock soared 268% from its March low and touched its highest mark since 2017 on Thursday, despite that the travel sector is still taking hits from the Covid-19 pandemic.
The future of Expedia’s share price depends on if its investments in the rental company Vrbo will have paid off, said Boris Schlossberg, managing director of FX strategy at BK Asset Management.
On the other hand, Airbnb’s market valuation of $130 billion is bigger than all of its rivals including Expedia, Booking, and TripAdvisor.
“It’s in an intermediate-term uptrend already just with history back to December, and with limited price history we don’t really have any ways to discern how overbought the stock is, but there are no real signs of upside exhaustion as we come into [Airbnb] earnings,” said Katie Stockton, founder of Fairlead Strategies.
Airbnb is set to post its quarterly report on Feb. 25 for the first time as a public company. Even though the company has capitalized on increased demand for vacation rentals during the pandemic, the pandemic-induced lockdowns have still weighed on its business, with analysts expecting a net loss of $8.42 a share.
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Technical analysis: Stock rotates lower
Shares of Expedia closed 3.6% higher last week although the price action was up nearly 8% at one point during the last week. This push higher resulted in a print of $153.26, which is the highest level the stock traded since 2017.
A deeper pullback could end around $140, where the old resistance is located. In particular, the support line of $142.50 could offer an opportunity to buyers who believe EXPE offers good value long-term. The next target on the upside is $155.62.
Elsewhere, shares of Airbnb are trading near the record high since making their public debut on December 10. In case there is a beat on quarterly estimates, we may see a push towards $227, where the next target for the buyers is located.
Expedia has reported a 67% decline in 2020 revenue but has marked a substantial recovery since, with its stock hitting the highest level since 2017.