Solid progress on the vaccination front and the lifting of COVID-19 restrictions helped the travel industry rebound slightly last year. But concerns over the Russian-Ukrainian war and aggressive interest rate hikes to tackle decade-high inflation have led to major market disruptions this year, leading to poor performance in equities. of travel. Last week, a massive sell-off pushed many travel stocks into oversold territory.

But on the bright side, relaxation of travel restrictions and steady job growth boosted demand for bookings ahead of the summer holidays. The battered travel stocks could therefore rebound soon.

So we think now may be the right time to pick some oversold travel stock Expedia Group, Inc. (EXPE) and Travel + Leisure Co. (NL). Based on their strong fundamentals and high profitability, these stocks could rebound soon.

Expedia Group, Inc. (EXPE)

EXPE in Bellevue, Washington, is an international online travel agency that operates through Retail; B2B; and trivago segments. The company offers a wide range of travel purchasing and booking services, advertising and media services and provides real-time access to schedules, prices and availability information for airlines, hotels and car rental companies.

On May 4, 2022, at its annual partner event EXPLORE 22, EXPE launched a three-tier strategy to serve travelers and partners and redefine its place in the industry. Expedia Group Open World, its new technology platform, operates and configures products and services and accelerates and improves the travel business. It introduced a reinvented marketplace that uses traveler reviews, customer service interactions, and more to reward every hotel establishment with a new guest experience score. It also introduced travel charts, smart shopping and price tracking features to add confidence to the travel shopping and booking experience. This should help EXPE gain widespread recognition in the industry.

For its first quarter of fiscal 2022 ended March 31, 2022, EXPE revenue increased 80.5% year-over-year to $2.25 billion. The company’s adjusted EBITDA was $173 million, compared to a loss of $58 million a year earlier. As of March 31, 2022, the company had $5.55 billion in Cash and cash equivalents.

Analysts expect EXPE’s EPS to rise 340.6% year-over-year to $7.27 for its 2022 fiscal year, ending Dec. 31, 2022. It beat estimates of street EPS in three of the past four quarters. The consensus revenue estimate of $11.75 billion for the same fiscal year represents a 36.7% increase over the prior year period. The company’s EPS is expected to grow at a rate of 22.8% per year over the next five years.

Gross profit margin, EBITDA margin and EXPE free cash flow margin over the last 12 months are 83.5%, 7.3% and 34.2%, respectively. Over the past week, the stock price has fallen 24.3% and closed yesterday’s trading session at $127.79, down 39.2% from its high of 52 weeks at $217.72.

Stocks POWR Rankings reflect this promising prospect. It has an overall rating of B, which is equivalent to Buy in our proprietary rating system. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.

It has a B rating for value, growth and quality. Click here to see additional ratings for EXPE Stability, Feeling, and Momentum. EXPE is ranked #4 out of 72 stocks in the the Internet industry.

Travel + Leisure Co. (NL)

TNL in Orlando, Florida, provides hospitality services and products through its Vacation Ownership; and the Travel and Membership segments. The Company is focused on providing vacation properties, managed rentals and exchange services and owns resorts and exchange properties. It also offers private label travel booking technology solutions. As of January 26, 2022, it had approximately 245 resorts.

On April 21, 2022, NL vacation ownership company Wyndham Destinations announced the completion of solar panel installation at its Limetree Beach Resort by Club Wyndham and will complete installation at WorldMark Clear Lake Resort in Nice, California this spring. Additionally, it is installing water-saving and leak-detection technologies in guest suites that reduce water consumption by 15-17%. TNL will have an estimated annual solar output of more than nine million kilowatt hours at 19 properties across the United States. The company plans to invest in opportunities to reduce water and energy consumption across its portfolio of 245 resorts.

NL’s net revenue for its first quarter of fiscal 2022, ended March 31, 2022, increased 28.8% year-over-year to $809 million. The company’s operating profit was $117 million, up 34.5% from the prior year period. While its adjusted net income rose 76.5% year over year to $60 million, its adjusted EPS rose 76.9% to $0.69. The company had $381 million in cash and cash equivalents as of March 31, 2022.

Analysts expect the company’s EPS to reach $4.55 for its 2022 fiscal year ending December 31, 2022, representing a 24.7% increase over the prior year period. It has exceeded Street’s EPS estimates in three of the past four quarters. The consensus revenue estimate of $3.63 billion for the same fiscal year indicates a 15.7% year-over-year improvement. Analysts expect NL EPS to improve at a rate of 25.8% per year over the next five years.

TNL’s trailing 12-month gross profit margin, EBITDA margin and free cash flow margin were 49.7%, 24.5% and 22.3%, respectively. And over the past week, the stock price has fallen 4.6% and ended yesterday’s trading session at $48.93, down 20.5% from its high in 52 weeks at $66.56.

TNL’s strong fundamentals are reflected in its POWR ratings. The stock has an overall rating of B, which is equivalent to Buy in our proprietary rating system.

It has a B rating for value, feeling and quality. Click here to see additional notes for NL (stability, growth and momentum). TNL is ranked #5 out of 22 stocks in the Travel – Hotels/Resorts industry.

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