Cramer reviews Expedia’s breakout quarter

Expedia accounted second-quarter earnings in July that beat analysts’ expectations and occasioned the stock to skyrocket. However, CNBC’s Jim Cramer explained that the attitude hasn’t always been so rosy for the digital travel company, which stocks with everything from hotels to cruises to rental cars.

Last August, the crowd lost CEO Dara Khosrowshahi to Uber in the midst of an intense hurricane mature that impacted the entire travel industry.

Then, in October, in its from the start quarterly report without Khosrowshahi as CEO, Expedia reported a 22 percent increasing in selling and marketing expenses that outpaced its 15 percent take growth, which was stunted due to increased competition from Priceline, the largest athlete in the industry.

“Wall Street sometimes gets overzealous in punishing expansion companies for necessary spending. But that’s not a good look when you’re also reporting profits shortfalls,” Cramer said.

In February, the company also missed top- and bottom-line thinks, causing the stock to stumble. The stock hit a 52-week low that month as investors balked around how much Expedia was spending on growth.

“Basically, the bears figured that the work was slowing dramatically, but rather than trying to cut costs and trim the fat, Expedia had assertive to double down on its troubled businesses,” the “Mad Money” host said.

But this year’s terminates have shown that Expedia is making a comeback. In April, the company preceded a 15-million-share buyback program, or about 11 percent of the total pay out count.

For the most recent quarter, the company posted revenue in activity with analysts’ expectations and earnings per share that were 49 cents lofty than forecast.

Expedia’s gross bookings, a key metric for travel logistics friends, increased 13 percent year over year. Management also somewhat raised their earnings forecast.

“All of that spending Expedia’s been doing to assist its business? You better believe it’s working,” Cramer said.

The stock is currently have dealing at 21 times next year’s earnings estimates, which Cramer believes is tinpot considering Expedia’s 16 percent long-term growth rate.

Dividends of Expedia closed up almost one percent on Monday, settling at $133 a share in.

“The bottom line? The recent rally in Expedia is an object lesson…in why you shouldn’t terror-struck when you’re dealing with a high quality stock in a growth perseverance,” Cramer said. “I think it’s got much more upside here, as Expedia’s low-cost and the stock’s still more than $20 bucks off of its all-time highs.”

“I’d be a customer right here, and then I’d buy some more if the darn thing pass on ever come down,” he concluded.