Shares of Expedia (NASDAQ: EXPE) charged sharply higher Friday, soaring by as much as 18.6%. As of 12:36 p.m. ET, the stock was still up 17.9%.

The catalyst that sent the online travel agency surging was its robust third-quarter report, which blew past fairly bullish expectations.

Expedia’s results were like a broken record

For the third quarter, Expedia’s revenues grew 9% year over year to $3.9 billion, which was an all-time record for any quarter. Strong lodging gross bookings of $18.5 billion — up 8%, and also a record — helped fuel that result. This resulted in record adjusted net income of $778 million and adjusted earnings per share (EPS) of $5.41, up 33%. The recurring theme here is clear: record-breaking results.

To give those numbers context, the analysts’ consensus estimates were for revenue of $3.86 billion and EPS of $4.99. Expedia cleared both bars with ease.

Expedia’s new unified loyalty program — One Key — has been showing momentum since its July launch. The company also announced that it had completed the migration of Vrbo into its system, the last of its major product integrations. Management believes it is “now well positioned to further accelerate our business and drive stronger shareholder returns.”

Here’s why Expedia stock is a buy

On the heels of its strong results, management announced a new $5 billion share repurchase authorization. With a market cap of just under $16 billion, a $5 billion buyback could retire nearly one-third of Expedia’s outstanding shares. This means that shareholders will be entitled to a growing portion of the company’s profits.

Furthermore, Expedia stock is selling for a song at just 20 times earnings and 1.4 times sales — significant discounts to the broader market.

The combination of improving business fundamentals, a rich buyback, and a dirt-cheap stock price make Expedia a buy.

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Danny Vena has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.