Expedia Stock (EXPE) Triggers Bullish Reversal Pattern with $200 Price Target in Sight

As a business tied to consumer sentiment, travel fare aggregator and metasearch engine Expedia Group (EXPE) struggled in the new year for understandable reasons. Thanks to President Donald Trump’s aggressive trade policies, the usual economic world order has been rattled, causing great concern among both households and businesses. At the same time, evidence is emerging that EXPE stock could see a sentiment reversal. Ultimately, I am bullish on Expedia for both fundamental and technical reasons.

First, on the narrative side, the ice may be beginning to thaw. While it’s undeniable that many families have struggled over the past few years due to the rising cost of living, the latest jobs report exceeded expectations, implying that society is slowly adjusting to new economic realities. Further, oil prices have been declining due to trade war concerns.

Granted, deflation in energy prices isn’t holistically a positive, given that it also indicates significant demand loss, which can ripple into other areas of the broader economy. Still, from an immediate perspective, this backdrop could be positive for EXPE stock, since reduced fuel costs may incentivize more travel. Whatever Expedia can get, I’m sure the company will take.

Still, a publicly traded company is ultimately beholden to market demand. At any given time, investors must decide whether they are net buyers of a stock. My central argument is that historically, EXPE’s behavioral profile reverts to the mean following a protracted series of pessimistic trades. Combined with encouraging fundamental tailwinds, I anticipate a positive response to Expedia’s first-quarter earnings results on Thursday this week, setting a foundation for an upward trajectory in 2025.

Behavioral Transitions in EXPE Stock

In a typical financial analysis of Expedia, experts might examine travel recovery trends following the COVID-19 pandemic, consumer behaviors related to travel and lodging, and the company’s expense discipline. While these are certainly interesting talking points, they’re also reflected in the demand profile of EXPE stock.

As stated earlier, investors are either net buyers of a security or they are not net buyers at any given moment. There are no half-demand states of existence. So, whatever happened in the past, whatever metrics were relevant at the time, investors voted with their capital whether those arguments were convincing or not.

Ultimately, from a trading perspective, we shouldn’t focus on why people are buying EXPE stock. The reasons are almost certainly different across regimes. Instead, it is better to focus on particular “behavioral states” of EXPE stock. The probability of a behavioral state changing in the near term is even more important.

Frankly, I couldn’t begin to tell you the odds of Expedia stock shifting from one price point to another. That’s practically an impossible question to tackle. However, if we defined EXPE not as price measurements but as behavioral sequences, these patterns can be categorized, quantified, and utilized for probabilistic analysis.

For example, in the past 10 weeks, EXPE stock printed a “4-6” sequence: four weeks of upside interspersed with six weeks of downside, with an overall negative trajectory across the period. This is a falsifiable sequence that anyone can verify. What most analysts won’t tell you, though, is that when this pattern flashes, there is historically a 65% chance that the subsequent week will result in an upswing.

Chart showing Expedia’s past and future 10-week price horizon. Credit: Joshua Enomoto

Statistically, this is notable because, as a baseline, the chances that any given one-week long position will be profitable are 53%. In other words, when the 4-6 sequence with net negative trajectory flashes, the probability matrix becomes more lopsided in favor of the bulls.

Of course, probabilities are just that — they’re not certainties. However, if we assume that the positive pathway wins out, median historical trends project that EXPE stock may reach around $167 over the next 10 weeks. Should the negative pathway materialize, the downside median risk is around $159.

Plotting a Bullish Strategy for Expedia

For traders seeking a quick blast, the 162.50/167.50 bull call spread for the options chain expiring this Friday could be interesting. This transaction involves buying the $162.50 call and simultaneously selling the $167.50 call, for a net debit paid of $265. Should EXPE stock rise through the short strike price of $167.50 at expiration — a possibility if Thursday’s earnings report is encouraging — the maximum reward is $235, a payout of nearly 89%.

A more palatable trade may be the 165/170 bull call spread for the options chain expiring May 16. This trade requires a net debit of $285 and features a maximum reward of $215 (a payout of over 75%). It takes advantage of the projected tendency of EXPE stock to see an early run off of the 4-6 sequence before tapering off in the later weeks.

What is the Target Price for Expedia Stock?

On Wall Street, EXPE stock carries a Moderate Buy consensus rating based on eight Buy, 19 Hold, and zero Sell ratings over the past three months. EXPE’s average price target of $198.42 implies almost 20% upside potential over the next twelve months.

See more EXPE analyst ratings

EXPE’s Pivot in Market Demand

Although travel fare aggregator Expedia has struggled this year for understandable reasons, the fundamental picture is starting to turn around. With a potentially improving (or at least adjusting) job market and lower fuel costs, EXPE stock could benefit from increased travel incentives.

However, the fate of the equity depends on true market demand, and a hidden signal suggests that EXPE could be on the verge of a sentiment reversal. Especially with an upcoming earnings report, there’s a possibility that Expedia could pleasantly surprise investors. Those who want to get ahead of the potential wave could consider buying call spreads for enhanced leverage.