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Booking Holdings (BKNG)
NASDAQ:BKNG
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Booking Holdings
(NASDAQ:BKNG)77Outperform
Positive Factors
Earnings and Financial Performance
Travel demand was much stronger than anticipated with room nights and EBITDA coming in above expectations.
Market Position and Strategy
Booking Holdings is a market leader in the fast-growing online travel industry, benefiting from technological advancements, increasing internet and device penetration, and heightened connectivity.
Negative Factors
Macroeconomic Conditions
Macroeconomic slowdown may impact discretionary spending on travel, potentially affecting travel service providers through fewer bookings and rates.
Booking Holdings (BKNG) vs. S&P 500 (SPY)
Market Cap
$160.74B
Dividend Yield0.71%
Average Volume (3M)300.51K
Price to Earnings (P/E)28.4
Beta (1Y)1.18
Revenue Growth11.11%
EPS Growth47.03%
CountryUS
Employees24,300
SectorConsumer Cyclical
Sector Strength53
IndustryHotels, Lodging & Leisure
Share Statistics
EPS (TTM)173.02
Shares Outstanding32,815,200
10 Day Avg. Volume343,661
30 Day Avg. Volume300,509
Financial Highlights & Ratios
PEG Ratio0.60
Price to Book (P/B)N/A
Price to Sales (P/S)6.84
Price to Cash Flow (P/CF)56.30
P/FCF Ratio56.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5,622.85Price Target Upside14.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering29
Booking Holdings Business Overview & Revenue Model
Company DescriptionBooking Holdings Inc. is a leading provider of online travel and related services, operating globally across numerous travel sectors. With a portfolio of brands including Booking.com, Priceline, Agoda, Rentalcars.com, and Kayak, the company offers a wide range of services such as hotel reservations, car rentals, airline ticketing, and vacation packages. Booking Holdings leverages advanced technology to connect travelers with accommodations, transportation options, and travel experiences.
How the Company Makes MoneyBooking Holdings primarily generates revenue through the commissions and transaction fees charged to travel service providers, such as hotels, airlines, and car rental companies, for bookings made through its platforms. The company operates a merchant model where it acts as an intermediary, collecting payment from customers and remitting it to service providers, often at a margin. Additionally, Booking Holdings benefits from advertising revenue on its websites and apps, as well as from partnerships with other travel-related businesses. Key revenue streams include accommodation reservations, which form the bulk of its income, followed by transportation services and advertising sales. The company's earnings are further supported by strategic partnerships with various travel industry stakeholders, enhancing its market presence and customer reach.
Booking Holdings Financial Statement Overview
Summary
Booking Holdings exhibits strong financial performance with robust revenue growth and profitability, as reflected in the income statement. However, the balance sheet's negative equity is a significant concern, suggesting potential financial risk despite reduced net debt. The cash flow statement highlights strong cash generation, supporting operational stability. Overall, the company is on a positive growth path but must address balance sheet weaknesses to ensure long-term financial health.Income Statement
Booking Holdings has shown strong revenue growth, with a 10.96% increase from 2023 to 2024. The gross profit margin is healthy at 100%, indicating efficient cost management. The net profit margin improved to 24.77% in 2024, up from 20.07% in 2023, suggesting enhanced profitability. The EBIT margin of 31.82% and EBITDA margin of 27.75% highlight robust operational efficiency. Overall, the income statement reflects a positive growth trajectory and solid profitability.85
Very Positive
Balance Sheet
The balance sheet presents a mixed picture with a concerning negative stockholders' equity of -$4.02 billion, indicating potential financial instability. The debt-to-equity ratio is not calculable due to negative equity, but the company has managed to reduce net debt, showing improved leverage management. With total assets at $27.71 billion and high total liabilities, the equity ratio is negative, stressing the need for careful financial monitoring.60
Neutral
Cash Flow
Cash flow analysis reveals strong operating cash flow, increasing to $8.32 billion in 2024 from $7.34 billion in 2023, indicating good cash generation from operations. Free cash flow also improved to $7.89 billion. The operating cash flow to net income ratio is 1.41, and the free cash flow to net income ratio is 1.34, both showing solid cash conversion efficiency. The company demonstrates strong cash management despite significant financing outflows.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 23.74B | 21.36B | 17.09B | 10.96B | 6.80B | Gross Profit |
| 23.74B | 21.36B | 16.48B | 10.36B | 6.15B | EBIT |
| 7.55B | 5.83B | 5.10B | 1.81B | 2.13B | EBITDA |
| 6.59B | 7.04B | 4.92B | 2.40B | 1.56B | Net Income Common Stockholders |
| 5.88B | 4.29B | 3.06B | 1.17B | 59.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 16.16B | 12.68B | 12.40B | 11.15B | 11.06B | Total Assets |
| 27.71B | 24.34B | 25.36B | 23.64B | 21.87B | Total Debt |
| 17.08B | 15.00B | 13.04B | 11.28B | 12.38B | Net Debt |
| 917.00M | 2.68B | 816.00M | 150.00M | 1.82B | Total Liabilities |
| 31.73B | 27.09B | 22.58B | 17.46B | 16.98B | Stockholders Equity |
| -4.02B | -2.74B | 2.78B | 6.18B | 4.89B |
| Cash Flow | Free Cash Flow | |||
| 7.89B | 7.00B | 6.19B | 2.52B | -201.00M | Operating Cash Flow |
| 8.32B | 7.34B | 6.55B | 2.82B | 85.00M | Investing Cash Flow |
| 129.00M | 1.49B | -518.00M | -998.00M | 2.64B | Financing Cash Flow |
| -4.20B | -8.91B | -4.90B | -1.24B | 1.53B |
Booking Holdings Technical Analysis
Neutral
4917.46
Price Trends
4895.93
Positive
4867.79
Positive
4355.91
Positive
Market Momentum
22.56
Positive
48.57
Neutral
20.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKNG, the sentiment is Neutral. The current price of 4917.46 is below the 20-day moving average (MA) of 4966.18, above the 50-day MA of 4895.93, and above the 200-day MA of 4355.91, indicating a neutral trend. The MACD of 22.56 indicates Positive momentum. The RSI at 48.57 is Neutral, neither overbought nor oversold. The STOCH value of 20.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BKNG.
Booking Holdings Risk Analysis
Booking Holdings disclosed 35 risk factors in its most recent earnings report. Booking Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Booking Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $38.35B | 17.10 | 8.12% | ― | 27.28% | 49.14% | |
77 Outperform | $160.74B | 28.37 | -146.32% | 0.71% | 11.11% | 47.03% | |
72 Outperform | $24.32B | 20.86 | 79.25% | ― | 6.64% | 69.85% | |
72 Outperform | $89.17B | 34.49 | 31.95% | ― | 11.95% | -44.02% | |
68 Neutral | $63.42B | 42.93 | -41.19% | 0.23% | 9.17% | 42.78% | |
66 Neutral | $74.66B | 32.52 | -144.82% | 0.91% | 5.85% | -18.43% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% |
* Consumer Cyclical Sector Average
Performance Comparison
BKNG
Booking Holdings
4,917.46
1,519.56
44.72%
TCOM
Trip.com Group Ltd. Sponsored ADR
64.01
20.89
48.45%
EXPE
Expedia
190.99
58.49
44.14%
MAR
Marriott International
271.10
26.46
10.82%
HLT
Hilton Worldwide Holdings
259.49
56.41
27.78%
ABNB
Airbnb
142.58
-21.29
-12.99%
Booking Holdings Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -2.01% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial results, significant growth in key areas such as room nights and airline ticket bookings, and strategic advancements in AI and the Genius loyalty program. However, challenges such as calendar shifts affecting upcoming quarters, workforce reductions, and transformation costs were noted.Highlights
Strong Financial Performance
Fourth quarter gross bookings grew 17%, revenue increased 14%, and adjusted EBITDA rose 26% year-over-year, all exceeding prior guidance.
Significant Growth in Room Nights
Fourth quarter room nights grew 13% year-over-year, with double-digit growth across all major regions.
Record Adjusted Earnings Per Share
Adjusted EPS for the fourth quarter increased 30% year-over-year.
Alternative Accommodations Growth
Alternative accommodations room nights grew 19% in the fourth quarter, with listings increasing by 8% to 7.9 million.
Airline Ticket Growth
Fourth quarter saw 52% growth in airline ticket bookings, an acceleration from previous quarters.
Merchant Gross Bookings Increase
Merchant gross bookings reached 59% of total gross bookings at Booking.com, a 9 percentage point increase year-over-year.
Expansion of Genius Loyalty Program
Genius loyalty program levels 2 and 3 represented over 30% of active travelers, with a mid-50s percentage of room nights booked by these travelers.
Generative AI Integration
Integration of AI into offerings like Booking.com's AI trip planner and Priceline's AI powered travel assistant, with expected operational efficiency improvements.
Capital Return Initiatives
A new $20 billion share repurchase authorization and a 10% increase to the quarterly cash dividend were announced.
Lowlights
Impact of Calendar Shifts and Leap Year
First quarter 2025 expected to face a 1 percentage point headwind from the extra day in February 2024 and a headwind from the calendar shift of Easter.
Workforce Reductions
Expectation of workforce reductions as part of a transformation program aimed at improving organizational agility and driving cost efficiencies.
Transformation Costs
Anticipated transformation costs over the coming years to be similar to the expected annual run rate savings of $400 million to $450 million.
Company Guidance
In the fourth quarter of 2024, Booking Holdings reported strong financial performance, exceeding expectations across multiple metrics. Room nights grew by 13% year-over-year, surpassing the high end of prior expectations, with double-digit growth across all major regions. This contributed to a 17% increase in gross bookings and a 14% rise in revenue, both above previous guidance. Adjusted EBITDA reached $1.8 billion, a 26% increase from the fourth quarter of 2023, and 12% above the upper range of guidance, driven by revenue outperformance and lower than expected adjusted fixed operating expenses. Adjusted earnings per share rose by 30% year-over-year. For the full year, gross bookings increased by 10% to $166 billion, revenue grew by 11% to $24 billion, and adjusted EBITDA rose by 17% to over $8 billion. Adjusted earnings per share saw a 23% increase, aided by a 7% reduction in the full-year average share count. Looking ahead to 2025, Booking Holdings aims for at least 8% constant currency growth in gross bookings and revenue, and a 15% increase in adjusted earnings per share, maintaining a positive long-term outlook for the travel industry.Booking Holdings Corporate Events
Executive/Board Changes
Booking Holdings Extends Former CFO’s Part-Time Role
Neutral
Dec 18, 2024
Booking Holdings Inc. has extended the part-time employment of its former CFO, David I. Goulden, as Executive Vice President of Finance from January 1, 2025, to March 31, 2025. During this period, Goulden will receive an annualized base salary of $315,000 but will not be eligible for cash bonuses or equity award vesting beyond this timeframe, impacting his compensation structure and the company’s executive management continuity.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.