Travel has always been a very important spending category for consumers globally. Post pandemic, we still see strong travel demand and better profitability for key online travel platform Expedia, EXPE. Through Expedia brands like VRBO, Expedia, Travelocity, Orbitz, Hotwire, CarRentals.com, and Homeaway, Expedia is getting its mojo back. There's a huge gap between the market cap of EXPE and its two key peers, Booking and AirBnb. As Expedia gets back on track and the industry continues to flourish, we expect a major catch-up opportunity in shares of EXPE. Using a conservative comp with ABNB, the VRBO division on a stand-alone basis would likely be worth at least 50% of EXPE total value making the rest of the business exceptionally cheap. EXPE trades at 9x, BKNG at 16x and ABNB at 27x earnings. We think EXPE can expand the multiple well and the company seems to agree with its new $5B buyback authorization.

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