What Is Fueling the Boom in Online Travel Stocks?

The Street Likes Expedia (EXPE)

In July, online travel agency Expedia (EXPE) posted a drop in its second-quarter profit. However,
the company’s adjusted earnings blew past consensus Street estimates.

Expedia earned 38 cents per share in Q2, easily topping analysts’ forecasts for a profit of 31 cents per share. The earnings beat sent the stock
soaring, and the flight into EXPE shares also was felt by other online travel stocks.

Impressively, Expedia saw a 13% increase in the number of air tickets sold in the second quarter, a number which flies in the face of conventional
wisdom suggesting that travel would come to a screeching halt as a result of the recession.

In the price chart here of EXPE shares, we see the stock trading above both its short-term, 50-day moving average (blue line), as well as its long-term,
200-day moving average (red line), two technically bullish signs for Expedia going forward. We also see that the shares now are trading at a new 52-week
high. Year-to-date, EXPE shares are up an incredible 171%.

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