Expedia Group Inc. (NASDAQ: EXPE) shares plummeted 6.75% in pre-market trading on Monday, following a significant target price cut by Wells Fargo and a reversal of earlier gains. The sharp decline comes amid mixed signals about the company's performance and outlook.
Wells Fargo analysts slashed their target price for Expedia from $199 to $143, a move that likely contributed to the negative sentiment surrounding the stock. This substantial reduction in price target suggests that the investment bank has become more cautious about Expedia's growth prospects or valuation.
Adding to the downward pressure, Expedia shares reversed their earlier pre-market gains. After initially rising 7.4% in early pre-market trading, the stock quickly reversed course, falling to a 2.2% loss before the larger decline. This volatility indicates uncertainty among investors regarding Expedia's near-term outlook.
The sell-off occurs despite Expedia's recent Q4 earnings report, which showed the company beating analyst expectations. Expedia reported revenues of $3.18 billion, up 10.3% year-over-year and exceeding estimates by 3.5%. The company also posted strong EBITDA results and decent growth in room nights booked. However, it appears that these positive results were overshadowed by concerns about future performance, as reflected in the Wells Fargo target price cut.
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