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Expedia Group, Inc. (EXPE) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Expedia Group, Inc. (EXPE)

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Intrinsic Value (DCF)

Current$294.28
→
Intrinsic$456.46
+55%
$305.69$456.46$742.74
Market implies 8% growth for 5 years
DCF analysis suggests EXPE could have 55% upside at 19% growth — verify assumptions match your view.
At $294, the market prices in 8% annual cash flow growth — a moderate expectation aligned with historical trends (19%).
Range: Bear $306 → Bull $743. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →15%17%19%21%
8%$559$607$659$714
10%$388$421$456$494
12%$294$318$345$373
14%$234$253$274$296

Bull Case

  • Bull case ($743) offers 152% upside at 23% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (8%) ≤ historical CAGR (19%)

Bear Case

  • Bear case ($306) with 15% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$2.77B
Year 2$3.29B
Year 3$3.91B
Year 4$4.65B
Year 5$5.53B
Terminal$81.36B

📐 Model Inputs

Growth Rate18.9%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.33BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is EXPE stock undervalued or overvalued?
🟢 UNDERVALUED

EXPE trades at $294.28 vs. our DCF-derived intrinsic value of $456.46, implying +53% upside. At a 10.0% WACC and 18.9% projected FCF growth, the market appears to be underpricing the present value of EXPE's future cash flows. The bear case ($296.23) still suggests upside, providing margin of safety.

What is EXPE's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.33B, projected at 18.9% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $2.35B net debt and dividing by 0.14B shares: Bear $296.23 | Base $456.46 | Bull $690.56. Current price $294.28 implies +53% to base case.

How is EXPE's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 18.9% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($65.30B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 28.0x.