Expedia Group Inc Valuation – March 2019 #EXPE

Company Profile (excerpt from Reuters): Expedia Group, Inc., formerly Expedia, Inc., incorporated on April 18, 2005, is an online travel company. The Company operates through four segments: Core Online Travel Agencies (Core OTA), trivago, Egencia and HomeAway. It has created a global travel marketplace used by a range of leisure and corporate travelers, offline retail travel agents and travel service providers. The Company offers travel and non-travel advertisers access to a source of incremental traffic and transactions through its media and advertising offerings on its transaction-based Websites. The Company’s Core OTA segment provides a range of travel and advertising services to its customers across the world, through a range of brands, including Expedia.com and Hotels.com in the United States, and localized Expedia and Hotels.com Websites throughout the world, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Wotif Group, CarRentals.com and Classic Vacations. The Company’s trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch Websites. Its Egencia segment, which also includes Orbitz Worldwide (Orbitz) for Business, provides managed travel services to corporate customers across the world. The Company’s HomeAway segment operates an online marketplace for the vacation rental industry.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPE – March 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $18,501,820,260 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.64 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 32.73% Fail
6. Moderate PEmg Ratio PEmg < 20 32.96 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.37 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.64 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -1.30 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.81
MG Growth Estimate 1.23%
MG Value $41.76
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $55.29
MG Value based on 0% Growth $32.41
Market Implied Growth Rate 12.23%
Current Price $125.67
% of Intrinsic Value 300.94%

Expedia Group Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $3.53 in 2015 to an estimated $3.81 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 12.23% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Expedia Group Inc revealed the company was trading above its Graham Number of $61.37. The company pays a dividend of $1.24 per share, for a yield of 1% Its PEmg (price over earnings per share – ModernGraham) was 32.96, which was below the industry average of 41.58, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-47.47.

Expedia Group Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$47.47
Graham Number $61.37
PEmg 32.96
Current Ratio 0.64
PB Ratio 3.37
Current Dividend $1.24
Dividend Yield 0.99%
Number of Consecutive Years of Dividend Growth 6

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Total Current Assets $5,197,000,000
Total Current Liabilities $8,060,000,000
Long-Term Debt $3,717,000,000
Total Assets $18,033,000,000
Intangible Assets $10,112,000,000
Total Liabilities $12,382,000,000
Shares Outstanding (Diluted Average) 151,344,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.00
Dec2018 $2.65
Dec2017 $2.42
Dec2016 $1.82
Dec2015 $5.70
Dec2014 $2.99
Dec2013 $1.67
Dec2012 $2.00
Dec2011 $3.41
Dec2010 $2.93
Dec2009 $2.06
Dec2008 -$17.60
Dec2007 $1.88
Dec2006 $1.40
Dec2005 $1.30
Dec2004 $0.00
Dec2003 $0.66
Dec2002 $0.46
Dec2001 $0.06

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.81
Dec2018 $2.85
Dec2017 $2.94
Dec2016 $3.08
Dec2015 $3.53
Dec2014 $2.49
Dec2013 $2.30
Dec2012 $1.26
Dec2011 $0.11
Dec2010 -$1.65
Dec2009 -$3.36
Dec2008 -$4.91
Dec2007 $1.30
Dec2006 $0.93
Dec2005 $0.63
Dec2004 $0.28
Dec2003 $0.35

Recommended Reading:

Other ModernGraham posts about the company

Expedia Group Inc Valuation – May 2018 $EXPE
Expedia Inc Valuation – February 2017 $EXPE
Expedia Inc. Analysis – October 2015 Update $EXPE
17 Companies in the Spotlight This Week – 9/27/2014
Expedia Inc. Annual Stock Valuation – 2014 $EXPE

Other ModernGraham posts about related companies

Booking Holdings Inc Valuation – January 2019 $BKNG
TripAdvisor Inc Valuation – January 2019 $TRIP
ILG Inc Valuation – July 2018 $ILG
Royal Caribbean Cruises Ltd Valuation – Initial Coverage June 2018 $RCL
Expedia Group Inc Valuation – May 2018 $EXPE
Booking Holdings Inc Valuation – April 2018 $BKNG
TripAdviser Inc Valuation – March 2018 $TRIP
Expedia Inc Valuation – February 2017 $EXPE
Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expeditors International of Washington Inc Valuation – January 2019 $EXPD

Company Profile (excerpt from Reuters): Expeditors International of Washington, Inc., incorporated on May 29, 1979, is a logistics company. The Company is a third-party logistics provider, and purchases cargo space from carriers, including airlines and ocean shipping lines on a volume basis and resells that space to its customers. The Company provides a range of customer solutions, such as order management, time-definite transportation, warehousing and distribution, temperature-controlled transit, cargo insurance and customized logistics solutions. In addition, the Company’s Project Cargo unit handles special project shipments that move through a single method or combination of air, ocean, and/or ground transportation. The Company’s services include airfreight services, ocean freight and ocean services, and customs brokerage and other services. The Company operates along five geographic areas: the Americas; North Asia; South Asia; Europe, and the Middle East, Africa and India.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPD – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $11,805,156,263 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.99 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 85.52% Pass
6. Moderate PEmg Ratio PEmg < 20 25.05 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 6.19 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.99 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.73
MG Growth Estimate 8.45%
MG Value $69.36
Opinion Fairly Valued
MG Grade B-
MG Value based on 3% Growth $39.59
MG Value based on 0% Growth $23.21
Market Implied Growth Rate 8.27%
Current Price $68.40
% of Intrinsic Value 98.61%

Expeditors International of Washington is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $1.75 in 2014 to an estimated $2.73 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 8.27% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Expeditors International of Washington revealed the company was trading above its Graham Number of $28.87. The company pays a dividend of $0.84 per share, for a yield of 1.2% Its PEmg (price over earnings per share – ModernGraham) was 25.05, which was above the industry average of 17.22. Finally, the company was trading above its Net Current Asset Value (NCAV) of $7.73.

Expeditors International of Washington performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $7.73
Graham Number $28.87
PEmg 25.05
Current Ratio 1.99
PB Ratio 6.19
Current Dividend $0.84
Dividend Yield 1.23%
Number of Consecutive Years of Dividend Growth 20

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Total Current Assets $2,746,473,000
Total Current Liabilities $1,377,468,000
Long-Term Debt $0
Total Assets $3,334,800,000
Intangible Assets $7,927,000
Total Liabilities $1,377,468,000
Shares Outstanding (Diluted Average) 177,173,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.28
Dec2017 $2.69
Dec2016 $2.36
Dec2015 $2.40
Dec2014 $1.92
Dec2013 $1.68
Dec2012 $1.57
Dec2011 $1.79
Dec2010 $1.59
Dec2009 $1.11
Dec2008 $1.37
Dec2007 $1.21
Dec2006 $1.06
Dec2005 $0.86
Dec2004 $0.59
Dec2003 $0.46
Dec2002 $0.44
Dec2001 $0.45
Dec2000 $0.38
Dec1999 $0.28
Dec1998 $0.22

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.73
Dec2017 $2.37
Dec2016 $2.14
Dec2015 $1.98
Dec2014 $1.75
Dec2013 $1.62
Dec2012 $1.56
Dec2011 $1.51
Dec2010 $1.33
Dec2009 $1.18
Dec2008 $1.15
Dec2007 $0.97
Dec2006 $0.79
Dec2005 $0.62
Dec2004 $0.49
Dec2003 $0.43
Dec2002 $0.39

Recommended Reading:

Other ModernGraham posts about the company

Best Dividend Paying Stocks for Dividend Growth Investors – April 2018
Expeditors International of Washington Inc Valuation – March 2018 $EXPD
Expeditors International of Washington Valuation – June 2016 $EXPD
Expeditors International of Washington Valuation – January 2016 Update $EXPD
Expeditors International of Washington Analysis – October 2015 Update $EXPD

Other ModernGraham posts about related companies

Kirby Corp Valuation – September 2018 $KEX
Knight-Swift Transportation Holdings Inc Valuation – August 2018 $KNX
Saia Inc Valuation – July 2018 $SAIA
Ryder System Inc Valuation – June 2018 $R
United Parcel Service Inc Valuation – May 2018 $UPS
JB Hunt Transport Services Inc Valuation – May 2018 $JBHT
C.H. Robinson Worldwide Inc Valuation – April 2018 $CHRW
FedEx Corp Valuation – April 2018 $FDX
Expeditors International of Washington Inc Valuation – March 2018 $EXPD
TFI International Inc Valuation – Initial Coverage $TSE:TFII

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expedia Group Inc Valuation – May 2018 $EXPE

Company Profile (excerpt from Reuters): Expedia Group, Inc., formerly Expedia, Inc., incorporated on April 18, 2005, is an online travel company. The Company operates through four segments: Core Online Travel Agencies (Core OTA), trivago, Egencia and HomeAway. It has created a global travel marketplace used by a range of leisure and corporate travelers, offline retail travel agents and travel service providers. The Company offers travel and non-travel advertisers access to a source of incremental traffic and transactions through its media and advertising offerings on its transaction-based Websites. The Company’s Core OTA segment provides a range of travel and advertising services to its customers across the world, through a range of brands, including Expedia.com and Hotels.com in the United States, and localized Expedia and Hotels.com Websites throughout the world, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Wotif Group, CarRentals.com and Classic Vacations. The Company’s trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch Websites. Its Egencia segment, which also includes Orbitz Worldwide (Orbitz) for Business, provides managed travel services to corporate customers across the world. The Company’s HomeAway segment operates an online marketplace for the vacation rental industry.

EXPE Chart

EXPE data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPE – May 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $17,072,540,487 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.74 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -7.74% Fail
6. Moderate PEmg Ratio PEmg < 20 36.22 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.11 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.74 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -1.47 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.14
MG Growth Estimate 3.89%
MG Value $51.11
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $45.51
MG Value based on 0% Growth $26.68
Market Implied Growth Rate 13.86%
Current Price $113.68
% of Intrinsic Value 222.41%

Expedia Group Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $2.49 in 2014 to an estimated $3.14 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 13.86% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Expedia Group Inc revealed the company was trading above its Graham Number of $48.51. The company pays a dividend of $1.16 per share, for a yield of 1% Its PEmg (price over earnings per share – ModernGraham) was 36.22, which was below the industry average of 40.97, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-57.98.

Expedia Group Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$57.98
Graham Number $48.51
PEmg 36.22
Current Ratio 0.74
PB Ratio 4.11
Current Dividend $1.16
Dividend Yield 1.02%
Number of Consecutive Years of Dividend Growth 5

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $7,431,000,000
Total Current Liabilities $9,991,000,000
Long-Term Debt $3,771,000,000
Total Assets $20,429,000,000
Intangible Assets $10,494,000,000
Total Liabilities $16,234,000,000
Shares Outstanding (Diluted Average) 151,817,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.51
Dec2017 $2.42
Dec2016 $1.82
Dec2015 $5.70
Dec2014 $2.99
Dec2013 $1.67
Dec2012 $2.00
Dec2011 $3.41
Dec2010 $2.93
Dec2009 $2.06
Dec2008 -$17.60
Dec2007 $1.88
Dec2006 $1.40
Dec2005 $1.30
Dec2004 $0.00
Dec2003 $0.66
Dec2002 $0.46
Dec2001 $0.06

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.14
Dec2017 $2.94
Dec2016 $3.08
Dec2015 $3.53
Dec2014 $2.49
Dec2013 $2.30
Dec2012 $1.26
Dec2011 $0.11
Dec2010 -$1.65
Dec2009 -$3.36
Dec2008 -$4.91
Dec2007 $1.30
Dec2006 $0.93
Dec2005 $0.63
Dec2004 $0.28
Dec2003 $0.35
Dec2002 $0.17

Recommended Reading:

Other ModernGraham posts about the company

Expedia Inc Valuation – February 2017 $EXPE
Expedia Inc. Analysis – October 2015 Update $EXPE
17 Companies in the Spotlight This Week – 9/27/2014
Expedia Inc. Annual Stock Valuation – 2014 $EXPE

Other ModernGraham posts about related companies

Booking Holdings Inc Valuation – April 2018 $BKNG
TripAdviser Inc Valuation – March 2018 $TRIP
Expedia Inc Valuation – February 2017 $EXPE
Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP
TripAdvisor Inc. Valuation – November 2015 Update $TRIP
Expedia Inc. Analysis – October 2015 Update $EXPE
Tripadvisor Stock Analysis – August 2015 Update $TRIP
Priceline Group Annual Valuation – 2015 $PCLN
Tripadvisor Inc. Quarterly Valuation – May 2015 $TRIP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expeditors International of Washington Inc Valuation – March 2018 $EXPD

Company Profile (obtained from Marketwatch): Expeditors International of Washington, Inc. engages in the provision of global logistics services. It offers airfreight services, ocean freight and ocean services, and customs brokerage and other services. The firm also provides customer solutions such as order management, time-definite transportation, warehousing and distribution, temperature-controlled transit, cargo insurance, and customized logistics solutions. It operates through the following geographical segments: Americas; North Asia; South Asia; Europe; and Middle East, Africa, and India. The company was founded by Peter Rose, Wang Li Kou, Kevin Walsh, Hank Wong, George Ho, Robert Chiarito, and Glenn Alger in May 1979 and is headquartered in Seattle, WA.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPD – March 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $11,387,197,415 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.32 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 73.50% Pass
6. Moderate PEmg Ratio PEmg < 20 25.12 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.82 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.32 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.55
MG Growth Estimate 6.90%
MG Value $56.90
Opinion Overvalued
MG Grade B-
MG Value based on 3% Growth $36.98
MG Value based on 0% Growth $21.68
Market Implied Growth Rate 8.31%
Current Price $64.08
% of Intrinsic Value 112.61%

Expeditors International of Washington is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.75 in 2014 to an estimated $2.55 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 8.31% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Expeditors International of Washington revealed the company was trading above its Graham Number of $26.39. The company pays a dividend of $0.84 per share, for a yield of 1.3% Its PEmg (price over earnings per share – ModernGraham) was 25.12, which was below the industry average of 36.6, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $7.83.

Expeditors International of Washington performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $7.83
Graham Number $26.39
PEmg 25.12
Current Ratio 2.32
PB Ratio 5.82
Current Dividend $0.84
Dividend Yield 1.31%
Number of Consecutive Years of Dividend Growth 20

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Total Current Assets $2,541,452,000
Total Current Liabilities $1,093,119,000
Long-Term Debt $0
Total Assets $3,117,008,000
Intangible Assets $7,927,000
Total Liabilities $1,125,150,000
Shares Outstanding (Diluted Average) 180,811,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.74
Dec2017 $2.69
Dec2016 $2.36
Dec2015 $2.40
Dec2014 $1.92
Dec2013 $1.68
Dec2012 $1.57
Dec2011 $1.79
Dec2010 $1.59
Dec2009 $1.11
Dec2008 $1.37
Dec2007 $1.21
Dec2006 $1.06
Dec2005 $0.86
Dec2004 $0.59
Dec2003 $0.46
Dec2002 $0.44
Dec2001 $0.45
Dec2000 $0.38
Dec1999 $0.28
Dec1998 $0.22

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.55
Dec2017 $2.37
Dec2016 $2.14
Dec2015 $1.98
Dec2014 $1.75
Dec2013 $1.62
Dec2012 $1.56
Dec2011 $1.51
Dec2010 $1.33
Dec2009 $1.18
Dec2008 $1.15
Dec2007 $0.97
Dec2006 $0.79
Dec2005 $0.62
Dec2004 $0.49
Dec2003 $0.43
Dec2002 $0.39

Recommended Reading:

Other ModernGraham posts about the company

Expeditors International of Washington Valuation – January 2016 Update $EXPD
Expeditors International of Washington Analysis – October 2015 Update $EXPD
Expeditors International of Washington Analysis – June 2015 Update $EXPD
18 Companies in the Spotlight This Week – 3/21/15
Expeditors International of Washington Quarterly Valuation – March 2015 $EXPD

Other ModernGraham posts about related companies

TFI International Inc Valuation – Initial Coverage $TSE:TFII
Landstar System Inc Valuation – Initial Coverage $LSTR
Kirby Corporation Valuation – Initial Coverage $KEX
Knight Transportation Valuation – Initial Coverage $KNX
United Parcel Service Inc Valuation – February 2017 $UPS
SPS Commerce Inc Valuation – Initial Coverage $SPSC
J B Hunt Transport Services Inc Valuation – Initial Coverage $JBHT
Celadon Group Inc Valuation – Initial Coverage $CGI
Saia Inc Valuation – Initial Coverage $SAIA
C.H. Robinson Worldwide Inc Valuation – August 2016 $CHRW

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expedia Inc Valuation – February 2017 $EXPE

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – January 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Expedia Inc (EXPE) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Expedia, Inc. is an online travel company. The Company makes travel products and services available, on a standalone and package basis, provided by various lodging properties, airlines, car rental companies, destination service providers, cruise lines and other travel product and service companies. Its Core OTA segment provides a range of travel and advertising services, through a range of brands, including Expedia.com and Hotels.com in the United States and localized Expedia and Hotels.com Websites throughout the world, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Venere, Wotif Group, CarRentals.com, and Classic Vacations. Its trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch Websites. Its Egencia segment, which also includes Orbitz for Business, provides managed travel services to corporate customers. Its HomeAway segment operates an online marketplace for the vacation rental industry.

EXPE Chart

EXPE data by YCharts

[level-free]
To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPE – February 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $18,205,962,616 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.55 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -180.38% Fail
6. Moderate PEmg Ratio PEmg < 20 37.54 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.82 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.55 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -1.07 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $3.24
MG Growth Estimate 15.00%
MG Value $124.64
Opinion Fairly Valued
MG Grade D
MG Value based on 3% Growth $46.94
MG Value based on 0% Growth $27.52
Market Implied Growth Rate 14.52%
Current Price $121.53
% of Intrinsic Value 97.51%

Expedia Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last ten years, the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $1.26 in 2012 to an estimated $3.24 for 2016. This level of demonstrated earnings growth supports the market’s implied estimate of 14.52% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Expedia Inc revealed the company was trading above its Graham Number of $36.54. The company pays a dividend of $0.98 per share, for a yield of 0.8% Its PEmg (price over earnings per share – ModernGraham) was 37.54, which was above the industry average of 31.53. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-55.93.

Expedia Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$55.93
Graham Number $36.54
PEmg 37.54
Current Ratio 0.55
PB Ratio 4.82
Current Dividend $0.98
Dividend Yield 0.81%
Number of Consecutive Years of Dividend Growth 4

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2016
Total Current Assets $3,620,294,000
Total Current Liabilities $6,619,438,000
Long-Term Debt $3,204,210,000
Total Assets $16,131,766,000
Intangible Assets $10,600,819,000
Total Liabilities $12,246,010,000
Shares Outstanding (Diluted Average) 154,236,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.29
Dec2015 $5.70
Dec2014 $2.99
Dec2013 $1.67
Dec2012 $2.00
Dec2011 $3.41
Dec2010 $2.93
Dec2009 $2.06
Dec2008 -$17.60
Dec2007 $1.88
Dec2006 $1.40
Dec2005 $1.30
Dec2004 $0.00
Dec2003 $0.66
Dec2002 $0.46
Dec2001 $0.06

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.24
Dec2015 $3.53
Dec2014 $2.49
Dec2013 $2.30
Dec2012 $1.26
Dec2011 $0.11
Dec2010 -$1.65
Dec2009 -$3.36
Dec2008 -$4.91
Dec2007 $1.30
Dec2006 $0.93
Dec2005 $0.63
Dec2004 $0.28
Dec2003 $0.35
Dec2002 $0.17
Dec2001 $0.02

Recommended Reading:

Other ModernGraham posts about the company

Expedia Inc. Analysis – October 2015 Update $EXPE
17 Companies in the Spotlight This Week – 9/27/2014
Expedia Inc. Annual Stock Valuation – 2014 $EXPE

Other ModernGraham posts about related companies

Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP
TripAdvisor Inc. Valuation – November 2015 Update $TRIP
Expedia Inc. Analysis – October 2015 Update $EXPE
Tripadvisor Stock Analysis – August 2015 Update $TRIP
Priceline Group Annual Valuation – 2015 $PCLN
Tripadvisor Inc. Quarterly Valuation – May 2015 $TRIP
Tripadvisor Inc. Quarterly Valuation – February 2015 $TRIP
Priceline Group Inc. Quarterly Valuation – February 2015 $PCLN
Tripadvisor Inc. Quarterly Valuation – November 2014 $TRIP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expeditors International of Washington Valuation – June 2016 $EXPD

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today - June 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Expeditors International of Washington (EXPD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Expeditors International of Washington, Inc. is a logistics company. The Company is a third party logistics provider, and purchases cargo space from carriers, including airlines and ocean shipping lines on a volume basis and resells that space to its customers. The Company provides a range of customer solutions, such as order management, time-definite transportation, warehousing and distribution, temperature-controlled transit, cargo insurance and customized logistics solutions. In addition, the Company’s Project Cargo unit handles special project shipments that move through a single method or combination of air, ocean, and/or ground transportation. The Company’s primary services include airfreight services, ocean freight and ocean services, and customs brokerage and other services. The Company is managed along five geographic areas: the Americas; North Asia; South Asia; Europe, and the Middle East, Africa and India.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPD – June 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $8,733,337,460 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.44 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 76.96% Pass
6. Moderate PEmg Ratio PEmg < 20 22.73 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.89 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.44 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EXPD value chart June 2016

EPSmg $2.09
MG Growth Estimate 5.12%
MG Value $39.14
Opinion Overvalued
MG Grade C+
MG Value based on 3% Growth $30.30
MG Value based on 0% Growth $17.76
Market Implied Growth Rate 7.12%
Current Price $47.50
% of Intrinsic Value 121.37%

Expeditors International of Washington is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $1.56 in 2012 to an estimated $2.09 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 7.12% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

Expeditors International of Washington receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

EXPD charts June 2016

Net Current Asset Value (NCAV) $6.49
Graham Number $22.07
PEmg 22.73
Current Ratio 2.44
PB Ratio 4.89
Current Dividend $0.72
Dividend Yield 1.52%
Number of Consecutive Years of Dividend Growth 20

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2016
Total Current Assets $2,087,480,000
Total Current Liabilities $854,415,000
Long-Term Debt $0
Total Assets $2,679,743,000
Intangible Assets $7,927,000
Total Liabilities $900,492,000
Shares Outstanding (Diluted Average) 183,018,000

Earnings Per Share History

Next Fiscal Year Estimate $2.21
Dec2015 $2.40
Dec2014 $1.92
Dec2013 $1.68
Dec2012 $1.57
Dec2011 $1.79
Dec2010 $1.59
Dec2009 $1.11
Dec2008 $1.37
Dec2007 $1.21
Dec2006 $1.06
Dec2005 $0.98
Dec2004 $0.71
Dec2003 $0.56
Dec2002 $0.52
Dec2001 $0.44
Dec2000 $0.38
Dec1999 $0.28
Dec1998 $0.22
Dec1997 $0.18
Dec1996 $0.12

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.09
Dec2015 $1.98
Dec2014 $1.75
Dec2013 $1.62
Dec2012 $1.56
Dec2011 $1.51
Dec2010 $1.33
Dec2009 $1.18
Dec2008 $1.17
Dec2007 $1.01
Dec2006 $0.86
Dec2005 $0.72
Dec2004 $0.57
Dec2003 $0.48
Dec2002 $0.42
Dec2001 $0.35
Dec2000 $0.28

Recommended Reading:

Other ModernGraham posts about the company

Expeditors International of Washington Valuation – January 2016 Update $EXPD
Expeditors International of Washington Analysis – October 2015 Update $EXPD
Expeditors International of Washington Analysis – June 2015 Update $EXPD
18 Companies in the Spotlight This Week – 3/21/15
Expeditors International of Washington Quarterly Valuation – March 2015 $EXPD

Other ModernGraham posts about related companies

Expeditors International of Washington Valuation – January 2016 Update $EXPD
FedEx Corp Valuation – November 2015 Update $FDX
United Parcel Service Inc. Valuation – October 2015 Update $UPS
Expeditors International of Washington Analysis – October 2015 Update $EXPD
FedEx Corporation Analysis – August 2015 Update $FDX
C.H. Robinson Worldwide Inc. Analysis – 2015 Update $CHRW
Expeditors International of Washington Analysis – June 2015 Update $EXPD
FedEx Corporation Quarterly Valuation – March 2015 $FDX
Expeditors International of Washington Quarterly Valuation – March 2015 $EXPD
Ryder System Inc. Annual Valuation – 2015 $R

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expeditors International of Washington Valuation – January 2016 Update $EXPD

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – November 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Expeditors International of Washington (EXPD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Expeditors International of Washington, Inc. is engaged in the business of providing global logistics services. The Company’s services include air and ocean freight transportation and customs brokerage. The Company also provides additional services, including order management, time-definite transportation, warehousing and distribution, cargo insurance and logistics solutions. The Company operates in Americas, including the United States, Other North America and Latin America; Asia Pacific; Europe, and Middle East, Africa and India. The Company provides airfreight services and acts either as a freight consolidator or as an agent for the airline, which carries the shipment. The Company operates Expeditors International Ocean, Inc. (EIO), an Ocean Transportation Intermediary, also known as Non-Vessel Operating Common Carrier (NVOCC), which specializes in ocean freight services in trade lanes across the world.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPD – January 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $8,388,264,299 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.34 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 63.19% Pass
6. Moderate PEmg Ratio PEmg < 20 22.59 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.56 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.34 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EXPD value Chart January 2016

EPSmg $1.96
MG Growth Estimate 4.49%
MG Value $34.20
Opinion Overvalued
MG Value based on 3% Growth $28.37
MG Value based on 0% Growth $16.63
Market Implied Growth Rate 7.04%
Current Price $44.20
% of Intrinsic Value 129.25%

Expeditors International of Washington qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the high PEmg and PB ratios.  The Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $1.51 in 2011 to an estimated $1.96 for 2015.  This level of demonstrated earnings growth does not support the market’s implied estimate of 7.04% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Expeditors International of Washington (EXPD)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

EXPD Charts January 2016

Net Current Asset Value (NCAV) $6.58
Graham Number $22.81
PEmg 22.59
Current Ratio 2.34
PB Ratio 4.56
Dividend Yield 1.54%
Number of Consecutive Years of Dividend Growth 20

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information Sep15
Total Current Assets $2,235,460,000
Total Current Liabilities $955,202,000
Long-Term Debt $0
Total Assets $2,827,018,000
Intangible Assets $7,927,000
Total Liabilities $987,973,000
Shares Outstanding (Diluted Average) 189,642,000

Earnings Per Share History

Next Fiscal Year Estimate $2.34
Dec14 $1.92
Dec13 $1.68
Dec12 $1.57
Dec11 $1.79
Dec10 $1.59
Dec09 $1.11
Dec08 $1.37
Dec07 $1.21
Dec06 $1.06
Dec05 $0.86
Dec04 $0.59
Dec03 $0.46
Dec02 $0.44
Dec01 $0.45
Dec00 $0.38
Dec99 $0.28
Dec98 $0.22
Dec97 $0.18
Dec96 $0.12
Dec95 $0.09

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.96
Dec14 $1.75
Dec13 $1.62
Dec12 $1.56
Dec11 $1.51
Dec10 $1.33
Dec09 $1.18
Dec08 $1.15
Dec07 $0.97
Dec06 $0.79
Dec05 $0.62
Dec04 $0.49
Dec03 $0.43
Dec02 $0.39
Dec01 $0.35
Dec00 $0.28
Dec99 $0.21

Recommended Reading:

Other ModernGraham posts about the company

Expeditors International of Washington Analysis – October 2015 Update $EXPD
Expeditors International of Washington Analysis – June 2015 Update $EXPD
18 Companies in the Spotlight This Week – 3/21/15
Expeditors International of Washington Quarterly Valuation – March 2015 $EXPD
26 Companies in the Spotlight This Week – 12/13/14

Other ModernGraham posts about related companies

FedEx Corp Valuation – November 2015 Update $FDX
United Parcel Service Inc. Valuation – October 2015 Update $UPS
Expeditors International of Washington Analysis – October 2015 Update $EXPD
FedEx Corporation Analysis – August 2015 Update $FDX
C.H. Robinson Worldwide Inc. Analysis – 2015 Update $CHRW
Expeditors International of Washington Analysis – June 2015 Update $EXPD
FedEx Corporation Quarterly Valuation – March 2015 $FDX
Expeditors International of Washington Quarterly Valuation – March 2015 $EXPD
Ryder System Inc. Annual Valuation – 2015 $R
FedEx Corporation Quarterly Valuation – December 2014 $FDX

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expedia Inc. Analysis – October 2015 Update $EXPE

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – September 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Expedia Inc. (EXPE) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Expedia, Inc. (Expedia) is an online travel company. The Company provides travel products and services provided by various lodging properties, airlines, car rental companies, destination service providers, cruise lines and other travel product and service companies. Its segments include Core Online Travel Agencies, which provides a range of travel and advertising services through a range of brands, including Expedia.com and Hotels.com in the United States and localized Expedia and Hotels.com Websites around the world, EAN, Hotwire.com, Travelocity, Venere, Wotif Group, CarRentals.com and Classic Vacations; trivago, which is engaged in sending referrals to online travel companies and travel service providers from its hotel metasearch Websites, and Egencia, which provides managed travel services. In addition, it offers Travelocity, Orbitz, ebookers, HotelClub, and CheapTickets brands and business-to-business offerings, including Orbitz Partner Network and Orbitz for Business.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPE – October 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $14,527,064,088 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.84 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -177.16% Fail
6. Moderate PEmg Ratio PEmg < 20 31.27 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 7.40 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.84 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -2.53 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EXPE value Chart October 2015

EPSmg $3.76
MG Growth Estimate 15.00%
MG Value $144.58
Opinion Fairly Valued
MG Value based on 3% Growth $54.45
MG Value based on 0% Growth $31.92
Market Implied Growth Rate 11.38%
Current Price $117.42
% of Intrinsic Value 81.21%

Expedia Inc. does not qualify for either the Enterprising Investor or the more conservative Defensive Investor.  The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last ten years, short dividend history, and the high PEmg and PB ratios.  The Enterprising Investor is concerned by the level of debt relative to the current assets.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should explore other opportunities at this time or proceed with a cautious speculative attitude.

As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $0.11 in 2011 to an estimated $3.76 for 2015.  This level of demonstrated earnings growth supports the market’s implied estimate of 11.38% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Expedia Inc. (EXPE)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

EXPE Charts October 2015

Net Current Asset Value (NCAV) -$35.58
Graham Number $48.48
PEmg 31.27
Current Ratio 0.84
PB Ratio 7.40
Dividend Yield 0.61%
Number of Consecutive Years of Dividend Growth 3

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Total Current Assets $4,990,392,000
Total Current Liabilities $5,968,228,000
Long-Term Debt $2,472,536,000
Total Assets $11,831,930,000
Intangible Assets $5,452,656,000
Total Liabilities $9,720,820,000
Shares Outstanding (Diluted Average) 132,960,000

Earnings Per Share History

Next Fiscal Year Estimate $6.39
Dec14 $2.99
Dec13 $1.67
Dec12 $2.00
Dec11 $3.41
Dec10 $2.92
Dec09 $2.06
Dec08 -$17.60
Dec07 $1.88
Dec06 $1.40
Dec05 $1.30
Dec04 $0.00
Dec03 $0.66
Dec02 $0.46
Dec01 $0.06

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.76
Dec14 $2.49
Dec13 $2.30
Dec12 $1.26
Dec11 $0.11
Dec10 -$1.65
Dec09 -$3.36
Dec08 -$4.91
Dec07 $1.30
Dec06 $0.93
Dec05 $0.63
Dec04 $0.28
Dec03 $0.35
Dec02 $0.17
Dec01 $0.02

Recommended Reading:

Other ModernGraham posts about the company

17 Companies in the Spotlight This Week – 9/27/2014
Expedia Inc. Annual Stock Valuation – 2014 $EXPE

Other ModernGraham posts about related companies

Tripadvisor Stock Analysis – August 2015 Update $TRIP
Priceline Group Annual Valuation – 2015 $PCLN
Tripadvisor Inc. Quarterly Valuation – May 2015 $TRIP
Tripadvisor Inc. Quarterly Valuation – February 2015 $TRIP
Priceline Group Inc. Quarterly Valuation – February 2015 $PCLN
Tripadvisor Inc. Quarterly Valuation – November 2014 $TRIP
Priceline.com Inc. Quarterly Valuation – November 2014 $PCLN
Expedia Inc. Annual Stock Valuation – 2014 $EXPE
Tripadvisor Inc. Quarterly Valuation – August 2014 $TRIP
Priceline Group Quarterly Valuation – July 2014 $PCLN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expeditors International of Washington Analysis – October 2015 Update $EXPD

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – September 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Expeditors International of Washington (EXPD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Expeditors International of Washington, Inc. is engaged in the business of providing global logistics services. The Company’s services include air and ocean freight transportation and customs brokerage. The Company also provides additional services, including order management, time-definite transportation, warehousing and distribution, cargo insurance and logistics solutions. The Company operates in Americas, including the United States, Other North America and Latin America; Asia Pacific; Europe, and Middle East, Africa and India. The Company provides airfreight services and acts either as a freight consolidator or as an agent for the airline, which carries the shipment. The Company operates Expeditors International Ocean, Inc. (EIO), an Ocean Transportation Intermediary, also known as Non-Vessel Operating Common Carrier (NVOCC), which specializes in ocean freight services in trade lanes across the world.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPD – October 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $8,790,402,877 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.35 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 60.99% Pass
6. Moderate PEmg Ratio PEmg < 20 24.38 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.79 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.35 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EXPD value Chart October 2015

EPSmg $1.93
MG Growth Estimate 4.22%
MG Value $32.71
Opinion Overvalued
MG Value based on 3% Growth $27.99
MG Value based on 0% Growth $16.41
Market Implied Growth Rate 7.94%
Current Price $47.05
% of Intrinsic Value 143.86%

Expeditors International of Washington qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned by the high PEmg and PB ratios, while the Enterprising Investor has no initial concerns.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $1.51 in 2011 to an estimated $1.93 for 2015.  This level of demonstrated earnings growth does not support the market’s implied estimate of 7.94% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Expeditors International of Washington (EXPD)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

EXPD Charts October 2015

Net Current Asset Value (NCAV) $6.72
Graham Number $22.53
PEmg 24.38
Current Ratio 2.35
PB Ratio 4.79
Dividend Yield 1.44%
Number of Consecutive Years of Dividend Growth 20

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Total Current Assets $2,334,755,000
Total Current Liabilities $993,681,000
Long-Term Debt $0
Total Assets $2,932,375,000
Intangible Assets $7,927,000
Total Liabilities $1,045,754,000
Shares Outstanding (Diluted Average) 191,918,000

Earnings Per Share History

Next Fiscal Year Estimate $2.26
Dec14 $1.92
Dec13 $1.68
Dec12 $1.57
Dec11 $1.79
Dec10 $1.59
Dec09 $1.11
Dec08 $1.37
Dec07 $1.21
Dec06 $1.06
Dec05 $0.98
Dec04 $0.71
Dec03 $0.56
Dec02 $0.52
Dec01 $0.44
Dec00 $0.38
Dec99 $0.28
Dec98 $0.22
Dec97 $0.18
Dec96 $0.12
Dec95 $0.09

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $1.93
Dec14 $1.75
Dec13 $1.62
Dec12 $1.56
Dec11 $1.51
Dec10 $1.33
Dec09 $1.18
Dec08 $1.17
Dec07 $1.01
Dec06 $0.86
Dec05 $0.72
Dec04 $0.57
Dec03 $0.48
Dec02 $0.42
Dec01 $0.35
Dec00 $0.28
Dec99 $0.21

Recommended Reading:

Other ModernGraham posts about the company

Expeditors International of Washington Analysis – June 2015 Update $EXPD
18 Companies in the Spotlight This Week – 3/21/15
Expeditors International of Washington Quarterly Valuation – March 2015 $EXPD
26 Companies in the Spotlight This Week – 12/13/14
Expeditors International of Washington Quarterly Valuation – December 2014 $EXPD

Other ModernGraham posts about related companies

FedEx Corporation Analysis – August 2015 Update $FDX
C.H. Robinson Worldwide Inc. Analysis – 2015 Update $CHRW
Expeditors International of Washington Analysis – June 2015 Update $EXPD
FedEx Corporation Quarterly Valuation – March 2015 $FDX
Expeditors International of Washington Quarterly Valuation – March 2015 $EXPD
Ryder System Inc. Annual Valuation – 2015 $R
FedEx Corporation Quarterly Valuation – December 2014 $FDX
Expeditors International of Washington Quarterly Valuation – December 2014 $EXPD
United Parcel Service Inc. Annual Valuation – 2014 $UPS
Fedex Corporation Quarterly Stock Valuation – September 2014 $FDX

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expeditors International of Washington Analysis – June 2015 Update $EXPD

220px-Expeditors-logoBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Most Undervalued Companies for the Defensive Investor – June 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Expeditors International of Washington (EXPD) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Expeditors International of Washington, Inc. is engaged in the business of providing global logistics services. The Company’s services include air and ocean freight transportation and customs brokerage. The Company also provides additional services, including order management, time-definite transportation, warehousing and distribution, cargo insurance and logistics solutions. The Company operates in Americas, including the United States, Other North America and Latin America; Asia Pacific; Europe, and Middle East, Africa and India. The Company provides airfreight services and acts either as a freight consolidator or as an agent for the airline, which carries the shipment. The Company operates Expeditors International Ocean, Inc. (EIO), an Ocean Transportation Intermediary, also known as Non-Vessel Operating Common Carrier (NVOCC), which specializes in ocean freight services in trade lanes across the world.

[level-free]
To read the rest of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.
[/level-free]
[level-mg-stocks-screens-subscriber]

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 5/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion - PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 - PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years - PASS
  4. Dividend Record – has paid a dividend for at least 10 straight years - PASS
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period - PASS
  6. Moderate PEmg ratio – PEmg is less than 20 - FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 - FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 5/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 - PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 - PASS
  3. Earnings Stability – positive earnings per share for at least 5 years - PASS
  4. Dividend Record – currently pays a dividend - PASS
  5. Earnings growth – EPSmg greater than 5 years ago - PASS

Valuation Summary

Key Data:

Recent Price $47.94
MG Value $29.10
MG Opinion Overvalued
Value Based on 3% Growth $27.02
Value Based on 0% Growth $15.84
Market Implied Growth Rate 8.61%
Net Current Asset Value (NCAV) $6.92
PEmg 25.73
Current Ratio 2.40
PB Ratio 4.80

Balance Sheet – March 2015

Current Assets $2,352,000,000
Current Liabilities $979,000,000
Total Debt $0
Total Assets $2,944,000,000
Intangible Assets $8,000,000
Total Liabilities $1,019,000,000
Outstanding Shares 192,700,000

Earnings Per Share

2015 (estimate) $2.06
2014 $1.92
2013 $1.68
2012 $1.57
2011 $1.79
2010 $1.59
2009 $1.11
2008 $1.37
2007 $1.21
2006 $1.06
2005 $0.86

Earnings Per Share – ModernGraham

2015 (estimate) $1.86
2014 $1.75
2013 $1.62
2012 $1.56
2011 $1.51
2010 $1.33

Dividend History

Conclusion:

Expeditors International of Washington qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the high PEmg and PB ratios.  The Enterprising Investor has no initial concerns.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with the evaluation.  As for a valuation, the company appears to be overvalued after growing its EPSmg (normalized earnings) from $1.51 in 2011 to only an estimated $1.86 for 2015.  This level of demonstrated earnings growth does not support the market’s implied estimate of 8.61% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Expeditors International of Washington (EXPD)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

[/level-mg-stocks-screens-subscriber]

Back To Top