Expedia’s free-cash-flow yield of 12.7% outpaces the 4.6% risk-free rate, driven by 10% revenue growth and a 27% conversion rate.
Expedia shares trade at $265.63, 13% below their 52-week high, despite a 46% gain over the past year. The stock’s 12.7% free-cash-flow yield compares favorably to the 4.6% risk-free rate, a spread of 8.1 percentage points.
The company’s three-year average free-cash-flow yield stands at 11.4%, with 27% of revenue converted to free cash flow. Revenue grew 10% over the past twelve months, accelerating from a 7.9% three-year average, fueled by a 22% rise in B2B gross bookings.
Expedia’s B2B segment, now Uber’s exclusive hotel partner, underscores its expanding role in the travel ecosystem. Net debt to equity is -0.03, indicating minimal leverage.