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Expedia Gallops On Trivago; But Terror Attacks Hit Global Travel

Expedia ‘s ( EXPE ) $632 million bet on Trivago paid off again Thursday when the No. 2 online travel agency announced first-quarter results that topped estimates, due in part to the German subsidiary’s 48% year-over-year growth. Expedia stock bounded as much as 10% Friday before the closing the session up more than 8%, near 116. Shares of No. 1 rival Priceline ( PCLN ) rose 2%, the day after the company’s chief executive stepped down following an investigation into an at-work relationship . For the quarter, Expedia reported $1.9 billion in sales, up 39% year over year, and 9 cents adjusted earnings per share, swinging from a 3-cent per-share loss in the year-earlier quarter. Both measures topped analyst views for $1.8 billion revenue and a 6-cent per-share loss. Credit Suisse analyst Stephen Ju boosted his price target on Expedia stock to 134 from 130 noting the “clean, across-the-board beat.” Ju kept his neutral rating on Expedia stock as he awaits the effect of $3.9 billion acquisition HomeAway. In total, Expedia spent $6 billion acquiring companies in 2015, Benchmark analyst Daniel Kurnos wrote in a research report. Trivago — which Expedia acquired a majority share in, in 2012 — was a highlight. Trivago revenue jumped 48% to $176 million and accounted for the second-largest chunk of revenue behind the $1.54 billion, up 32%, achieved in Expedia’s core online travel agency segment. Egencia and HomeAway brought in $110 million and $142 million. “Trivago again achieved profitability, as aggressive spending drove 48% revenue growth while still achieving 25% contribution margins in Europe and 10% contribution margins across all geographies outside of Europe,” Kurnos wrote. International bookings came in at $6.6 billion, up 22% year over year, but about $500 million shy of the consensus, Kurnos wrote. Domestic bookings of $12.3 billion, up 38%, were in line with views. “We think most travel companies are being given a pass given the uncertain overall impact of the recent terror attacks,” Kurnos wrote. He has a 135 price target and buy rating on Expedia stock. Cowen analyst Kevin Kopelman expects a difficult second quarter as Expedia faces Easter-related headwinds and a difficult comparison. Of Expedia’s 37% total bookings growth in Q1, 24% was organic. For Q2, he forecasts 26% and 18%, respectively. But Q4 could signal a return to growth “as Expedia anniversaries both the Paris attacks and the initial rollout of TripAdvisor’s Instant Book partnership with Priceline,” he wrote in a report. Kopelman reiterated both a 135 price target and outperform rating on Expedia stock.

Personal Chef Booking Platform Kitchit Shuts Down

Personal chef booking platform Kitchit has announced that it will cease operations Friday. IBD first reported the impending closure on April 22 . At the time, CEO Brendan Marshall denied that the company had plans to close. When asked about shut down, Marshall referred IBD to remarks on the company’s website but declined further comment. According to the website statement, Kitchit was earning 30% to 40% gross profit margins, and monthly growth was 30%. The company said that it served 100,000 customers. Kitchit competed with the fast-growing swath of food-related tech companies, which offer a range of services including on-demand restaurant delivery and ready-to-be-cooked meals. The company had raised over $8 million from investors such as Javelin Venture Partners, which could not be immediately reached for comment. E-commerce leader  Amazon.com ( AMZN ) and its Prime Now unit have a restaurant delivery service that has been slowly rolling out across the U.S. Digital cash register and payments processor Square ( SQ ) offers a competing service, Caviar. GrubHub ( GRUB ) and Yelp ( YELP ) also have food delivery services. Food tech companies have been struggling of late. Startups such as SpoonRocket, Dinner Lab and Kitchensurfing have all shut their doors in recent months.

How LinkedIn Turned A Bad Business Situation Into Good

It was a shocking day for LinkedIn ( LNKD ) when the business networking company reported fourth-quarter earnings on Feb. 4 that led to a 44% plunge in its stock price. In its Q4 earnings conference call, LinkedIn executives revealed a company reshuffling that had many observers scratching their heads. Analysts slashed price targets as LinkedIn announced it would shutter a unit worth about $50 million in revenue, a move one analyst called a “gigantic mistake.” Apparently it wasn’t. LinkedIn committed new resources toward newer products that cashed in when the company reported first-quarter earnings  after the close Thursday that walloped expectations. LinkedIn reported Q1 revenue of $860.7 million, up 35% year over year and beating the consensus of $828.5 million. Earnings per share minus items rose 30% to 74 cents, beating the consensus of 60 cents, as polled by Thomson Reuters. Its guidance also exceeded views. “We believe LinkedIn righted its ship with a solid first-quarter upside and raised guidance,” wrote Needham analyst Kerry Rice, who maintained a buy rating and price target of 200. Many of the issues LinkedIn revealed were not as severe as expected, Rice wrote in a research note. LinkedIn generates revenue from three business segments. Revenue from Talent Solutions, which gets fees from companies and headhunters seeking hires, rose 41% to $558 million. Revenue from Marketing Solutions, which sells ads, increased 29% to $154 million. Revenue from Premium Subscriptions increased 22% to $149 million. In its reshuffling, LinkedIn created products such as Referrals and Connectifier, online platforms that help customers drive a greater share of hiring through LinkedIn. In its Marketing Solutions unit, LinkedIn redoubled its focus on Sponsored Content. which provides targeted advertising that appears in the feeds of social platforms on LinkedIn. These new products and others were a significant contributor that helped LinkedIn beat expectations. Sponsored Content revenue rose 80% and is the fastest-growing segment of Marketing Solutions, LinkedIn said. “LinkedIn posted Q1 upside across every business unit,” wrote Pacific Crest analyst Evan Wilson in a report. “We are confident in LinkedIn’s uniquely valuable data set and think the company has set itself up for further upside over the balance of the year.” Wilson has a overweight rating on LinkedIn stock and a price target of 190. Jefferies has a buy rating and price target of 180. RBC Capital Markets has a market perform rating and price target of 160. Nomura has a buy rating and price target of 180. LinkedIn stock was up 3%, near 126.50, in afternoon trading in the stock market today . Since the 44% plunge three months ago, LinkedIn stock is up 15%. Image provided by Shutterstock .