EXPE – Market expectations are for substantial declines in Uniform ROA, but management is confident in property density and repeat rates, search channels, and pricing

• Expedia, Inc. (EXPE:USA) currently trades at historical lows relative to UAFRS-based (Uniform) Earnings, with a 3.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident in property density and repeat rates, search channels, and pricing
• Specifically, management is confident that their increased investment in inventory leads to better property density, and thus higher repeat rates. Additionally, they are confident in their ability to decrease the amount of time it takes for an added property to be loaded into their metasearch and search engine marketing channels. They are also confident in their cloud platform investments, and that their pricing rates will not be pressured by commission rates