Booking Holdings Inc. (BKNG) on Q1 2021 Results - Earnings Call Transcript

Operator: Welcome to Booking Holdings First Quarter 2021 Conference Call. Booking Holdings would like to remind everyone that this call may contain forward-looking statements, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual results may differ materially from those expressed, implied or forecasted in any such forward-looking statements. Expressions of future goals or expectations and similar expressions reflecting something other than historical facts are intended to identify forward-looking statements. Glenn Fogel: Thank you. And welcome to Booking Holdings first quarter conference call. I'm joined this afternoon by our CFO, David Goulden. I am pleased to start by reporting further improvement in our accommodations business, with first quarter room nights declining 54% versus Q1 2019, which was 6 percentage points better than our fourth quarter 2020 decline. This improvement was driven by solid signs of increasing travel demand in certain countries and by our team's strong execution. David will provide the details on our first quarter results in his remarks. As we have said before, we believe that the rate of recovery for travel will depend heavily on the rate and severity of new COVID-19 cases, the timing of effective and broad-based vaccine distribution, and hopefully, even more effective treatments in the future. While the pace of vaccine distribution remains frustratingly slow in most places around the world, Israel, the UK and the US are benefiting from successful vaccine distribution programs. In each of these countries, we have seen encouraging booking trends. We support our view that vaccine distribution is a key to unlocking pent up travel demand. In our own survey work earlier in the year, we found that over 70% of Americans said that the early distribution stage of COVID-19 vaccines made them feel more hopeful and optimistic about traveling in 2021. As countries ramp up vaccine distribution, which we are now starting to see in more European countries, we believe that we will start to see booking strength expand to more parts of the world. While there are encouraging signs of recovery in some countries right now, the current situation in other countries such as India, where we are seeing staggering increases in COVID-19 cases and an enormous human tragedy happening reminds us that recovery is not underway everywhere. And unfortunately, in some countries, the situation is getting worse. David Goulden : Thank you, Glenn. And good afternoon. I'll review our operating results for the first quarter and provide some color on the trends we've seen so far in the second quarter. To avoid the comparison to the initial spread of the pandemic in 2020, all growth rates are relative to the comparable period in 2019, unless otherwise indicated. Information regarding reconciliation of non-GAAP results to GAAP results can be found in our earnings release. I also want to remind you that, during the period of bookings recovering, revenue will recover more slowly than bookings due to timing differences and this will impact our booking to revenue take rates. Operator: . Your first question comes from the line of Justin Post from Bank of America. Justin Post: I think a couple of things would help. Can you give us any updates or your thoughts on mix between US, Europe and Asia, just so we can think about the recovery? And then, can you remind us what happened in Europe last summer when cases came down? Did you see a rapid increase? And are you seeing bookings pick up as people are vaccinated right now in Europe? David Goulden: David, why don't you take the…? David Goulden: Justin, let me take that. So, just to remind you of our historic mix, we have basically said that Europe is, of course, our largest region historically. If you think kind of roughly 50% or maybe a little bit more, you wouldn't be far off being correct. Asia, we said, historically, again pre-COVID, was about 20% with no single country being more than low-single digits. And that means that you've really got 30% left for US and rest of world combined. So, that is our pre-COVID mix. Obviously, that mix changed a little bit with the dynamic of what's happened recently. Obviously, the US has gone up as that's been the most recovered marketplace. So, that's the historic reference points. In terms of last summer, we saw a couple of things. We, of course, did see, after the first wave came down, we saw people getting more confident with traveling. Of course, vaccines were still not available at that point in time. So, people were kind of traveling quite carefully and traveling locally. What we have seen and we saw in several places, what we've seen so far is a very consistent trend, that when cases come down, when vaccination rates go up, when government restrictions start to lift, good things happen. We see that happening in the US right now. We see that happening in Israel. We mentioned a couple of other areas that are doing better than the average. So, our expectation is that we'll see those positive trends start to occur in other parts of the world, particularly in Europe as things are starting to improve. As we mentioned, we are seeing things improving on April versus March and Europe is now no longer the least recovered region. Justin Post: Maybe one follow-up. You mentioned share gains. Maybe for Glenn, the opportunities. Maybe you can give us a little more color on that. And do you think your US bookings are trending above kind of industry averages right now. Glenn Fogel: As I said, I'm very pleased with the Q1 results in the US. I mentioned both Priceline.com and Booking.com doing well. So, we are very happy about that. I don't have – we're not done with the quarter yet. So, we don't have industrywide numbers to go against. So, I'm just going to say that I'm pleased with what we're producing and we'll see everybody's reported how we did. Operator: Your next question comes from the line of Kevin Kopelman from Cowen. Kevin Kopelman: I have a couple of follow-ups on the US growth. Can you give us any more of a sense of how much Q1 improved versus Q4. And obviously, the overall industry improved in the US in the first quarter quite a bit, but was Booking.Com or bookings growth in the US also a product of any specific decisions you made in the first quarter along the lines of your new strategic – increasing strategic focus on US share gains, for example, changing the way you're doing marketing or anything like that? Glenn Fogel: Why don't I talk generally about strategy and then, David, if he wants – I'm not sure he wants to disclose anything more about specific numbers and gains. I will say this. I've said this in several calls in the past, actually many, about increasing our performance in the US is a strategic priority. And we have said that we under index in the US. So, we are doing many, many things to try and improve that. And everything from the basics of making sure we have the right selections of properties that people want to making sure it's the right price, making sure we're competitive. I talked about how we had to have the US payments platform up and running for Booking.com, so we can do creative, new things such as our back to travel promo, which of course wasn't in Q1, but just another example of things that we're doing. And there's a lot of just blocking and tackling done by both teams, Priceline.com and the people at Booking.com, working with our suppliers, coming up with ways that we can help them get more customers. So, it's so many different things. There's no one thing to say that was the silver bullet. And I expect that we will be able to continue to do this. I hope to be able to continue to do this in the future. It will remain a priority for us. And, David, if you want to talk about numbers. David Goulden: I will just, Kevin, reiterate what we said and give you a little flavor, make sure you understand where the emphasis was. So, things did improve significantly sequentially in the US during the quarter, and we have positive room night growth in the US year-on-year, which is great, because, obviously, international business was still down a fair amount. When we got into March, that room night growth in the US was very strong, which I characterize that as above any of our normal growth rates. That strengthened further into April. So, very strong plus. And then if you just kind of double click down and look at just the domestic, recognizing there is some substitution effect in there, the growth rates in the US was very strong for the entire quarter, positive for each month of the quarter and getting stronger, was again stronger in April than it was in March. Kevin Kopelman: If I could, just one follow-up on, you did the $50 travel credit promo in April. You see that as kind of an ongoing tactic or strategy that you might use? How much would this shift be a shift in costs from marketing spend to contra-revenue? Glenn Fogel: Well, we just put it out. Still an opportunity still to book on that one. It goes till the end of May for US people. They can still do a book, but they had to do the – in April, they had to actually activate it. So, we don't have a lot of to tell you what we think that's going to be. It certainly is something that – it's one different thing that I pointed out, not because a huge driver, but just an example of things that we haven't done in the past that we will do in the future. And in fact, you may have noticed it, we started a very similar, but not exactly the same program in the UK yesterday. Or maybe it's two days ago. The point being that we're trying to be more creative and going forward coming up with different ways to bring those customers to us, show them what a great product we have, great service we have and make sure they come back to us in the future, albeit not with the promotion. Operator: Our next question comes from the line of Mark Mahaney from Evercore. Mark Mahaney: I've got two questions. I want to first start off, I think, Glenn, you made some comments about the mix of alternative accommodations, and being I think relatively similar in the March quarter versus a year ago. And I guess, I would have thought that it would have been kind of structurally higher, that somehow because of – during the COVID crisis. I know you talked about that mix increasing. Did you expect it to recover back? Would you expect it to revert back to where it was before? That is alternative accommodations as a percentage of your lodging mix. Or would you expect it to be somewhat elevated post COVID just because of the greater exposure that a lot of consumers had to that during the crisis? Glenn Fogel: Mark, I'll answer your question first about the general, what I expect in the future, and I'll let – it was Dave that talked about the mix and he can talk about – because we have more in Europe and it's the US, and I'll let him go through that why we are where we are. In terms of the future, here's the situation. We've been seeing for many, many years – and everyone's aware of this – that people have been more interested in the alternative accommodation. This is a global phenomenon. It's been going up at a steady rate for some time. COVID created a step functional change where people who may never have thought about an alternative accommodations, now they're thinking I want to go to a home that's not near people, maybe near the beach or near the mountains and I feel safer there. Now, having tried that, in the future, the question is you just asked is, will people go back to their former habits of some people going to hotels, some people homes and it will be a more gradual increase and will be a drop back first and then back up? I don't think anybody really knows. But I would make the guess that people having tried the alternative accommodations during the pandemic will forever have it in their consideration set. And they may not always use it, they will choose what type of property fits their needs. But now, because it is part of their consideration set, I think there is a functional change in increased mix in the long run. That being said, for us, we do both. We have the greatest selection of both hotels and non-hotel accommodations together combined. So, we feel we are very well positioned globally for that. Though I have spoken in the past, in some regions, we are definitely in sufficient supply that we need to build up. And David, do you want to explain again about the issue because of mix in terms of geographies and the mix in properties? David Goulden: Mark, let me just explain that maybe in a slightly different way. So, starting with Europe, if you just look at our business within Europe, you only looked at it with that lens, you would see alternative accommodation mix in Q1 this last year up a fair amount compared to Q1 2020 and also versus Q1 of 2019. So within Europe, where we have our largest mix of alternative accommodation, we see an increase in mix. But you also remember, I said that Europe in Q1 was our lowest performing region. And of course, the highest performing region was the US where we have a much larger mix of alternative accommodation. So, that's mix effect means that, in total, our alternative accommodation mix did not increase. But in Europe, for example, where it's the largest, it did increase a fair amount. So mix effect is really the biggest region. In total, in Q1, the mix of alternative accommodations was very similar to the 30% number we gave out for all of FY 2020. But again, within different regions, there are shifts occurring. Mark Mahaney: If I can ask one follow-on question, I think you talked about a better ROI in paid marketing channels. And just your guess as to whether that's sustainable or not. Thanks a lot. David Goulden: That's a good question. There are many things going on in ROI. So, yes, we did see slightly improved ROI on the paid channels. We also saw an increase in direct mix. And those two together let us have marketing grow less than bookings in the quarter. But there are many factors that go into accounting ROI, including your cost per click, conversion rate, cancellation rates, and we're still in a period of, I'd say, high volatility across all of those. So, it's not reasonable to point to any one factor as to why ROIs were up, but they were up slightly . And it's only just one quarter. So, given the volatility of things happening, we wanted to point it out, but too early to call a trend. Operator: Your next question comes from the line of Lloyd Walmsley from Deutsche Bank. Christopher Kuntarich: This is Chris on for Lloyd. Can you just talk a little bit about, I guess, booking frequency associated. It sounds like there has been meaningful pickup in share with you guys' app. Just kind of talk to us a little bit about booking frequency on app and how that compares to non-app users. Thanks. Glenn Fogel: David, I don't know if you ever disclosed anything in terms of frequency on the app? David Goulden: No. Chris, let me tell you about what we have talked about and see if that answers the question and then maybe we haven't got your question completely right. But just to kind of remind us where we are right now, over two thirds of our bookings are mobile, majority of those are on app. Our app booking customers are our most frequent bookers relative to other direct channels. Because always we can have a direct booking through a mobile web direct booking or through a desktop booking. And the app bookers are the most loyal and the most returning. But we really haven't gone into frequency. And also, I'd say right now, in the current environment where we're still very much recovering, frequency metrics are not the most critical ones that we focus on right now. It's more the overall top line growth rates. But we are pleased what we're seeing with a trend towards app usage, the increase in the mix and the repeat behavior of app users. Those are all positive things for us. Christopher Kuntarich: Just want to make sure, more of a housekeeping question. I saw a little bit of repurchase activity that was not related to you guys starting up your buyback again, is that correct? David Goulden: No, that was related to employee stock purchases. That was not buyback related. Operator: Your next question comes from the line of Brian Nowak from Morgan Stanley. Alaxandar Wang: This is Alax Wang on for Brian. Thanks for taking our question. First, just on flights, I appreciate the update on the rollout to 18 countries. Maybe any early learnings you could share with us, particularly in the US and potentially attach rates that you could share and sort of what do you foresee as the key two or three incremental investments to sort of execute on flights as we progress through the year? Glenn Fogel: We don't give away – I don't believe we ever talked about the actual attach rates. But I will say that that is an important reason we do flights and that getting that booker upfront is important, so that we can then get them to buy something that will have a higher margin. The 18 countries in the Booking.com is now working in, we are getting initial – and we've been doing it for some time now, obviously, I guess a year now approximately. We are getting some learnings, how can we improve it, how can we make it better? We really haven't marketed this at all in terms of the way we market our hotels offering because we want to get it right before we start spending a lot of money. We don't want to waste money as you know. I am very pleased, though, with the very limited effort that we've done that people are using it and we are getting feedback that people are coming back. So, that's good. It's something that's important for the long run. And I want to emphasize how much this is a long game we're playing here because, as you know, the number is still very, very, very small and this is very early. But we hope in the long run that this connected trip, which is not just the flights, but it's also the ground transportation and the attractions and the dining, all the things that people do when they are traveling, to create something that makes them want to always use our app more than anything else. When they think of travel, they come back to us. So, it's critical that we have that first thing, which is important to a lot of people, flights. And we're going to continue to make investments into it to make sure that is absolutely a great, great service. Alaxandar Wang: Just one follow-up. I think a couple quarters ago, you guys had tested a digital brand campaign. I'm not sure if there's anything you can share on that. But maybe bigger picture, as we look at the performance channels ex search, do you see any opportunities to sort of lean into more of the non-search performance channels with online video as we're seeing increasing sort of digital transformation as a result of the pandemic? Glenn Fogel: We recognize that's where the eyeballs are going. So, we need to make sure that we are putting our name appropriately in front. So, people when they think of travel, they think of us. So we are cognizant of that fact and we are we are working on that. So yes, we will continue to work with that. Operator: Your next question comes from the line of Mario Lu from Barclays. Mario Lu: I have one on agency versus merchant bookings and one on payments. So, the one on agency versus a merchant, it looks like the merchant bookings recovered to a level much quicker in 1Q compared to agency. Is there anything to kind of call out there to explain the quicker recovery? And then on payments, you guys mentioned you guys are north of 20% of bookings. Is there a specific target you guys plan to reach in the long term? And how should that flow through to say revenue and operating margins over time? Glenn Fogel: Dave, why don't you talk to about agency/merchant question and I'll talk about the long vision on payments. David Goulden: Actually, we saw a slightly lower mix of merchants in Q1 this year than in Q1 last year, both in total and at Booking.com. Because bear in mind, you're kind of comparing essentially an almost a non-crisis quarter – last year, of course, Q1, in March, things got worse, but most of the quarter was not crisis. And now you're talking about – comparing with a quarter that is very much still in the crisis with recovery mode. So, people in the short term, looking at the more flexible agency, pay the hotel model because that has just an attractive proposition in times like this when flexibility becomes very, very important. We do expect the merchant business to actually increase during the year at Booking.com where we have obviously the big mix shift happening. And we still think that the merchants business in total in 2021 will be a slightly higher mix than it was in 2020. But of course, flexibility is one of the factors that is important as people are looking at the bookings in this environment. So that's what's going on this year. Glenn Fogel: In the long view, we'd like to get as much business as possible on payments because we believe we'll create a better service for both our customers for traveling and our supplier partners to be able to do all sorts of things you can't do when it's just a straight agency play. And we believe we can provide value to everyone in that way. And I gave that example earlier about – we couldn't do a back to trial promotion if we didn't have a payment product to do that. And there are many ways we're going to be able to merchandise people's – our supplier partners, different ways to merchandise their offerings in ways that you can really only do well with a payment platform. And, of course, putting things together, bundling, all different things. So obviously, we would like to get as many people in because it's good for everybody who comes into it, both the customer and the supplier. That being said, we know that we'll never get to 100%. There will be – still be lots of people who will say, all I need is hotel, I like this agency thing, I pay the desk, it's all fine, we'll see if that happens, whatever. But even in that situation, we may actually do the payment for the hotel in a way that we can save them money. So it's a great opportunity for us. But it's the long view and it's going to take some time to get there. David Goulden: Just to kind of reiterate what we said before about how it plays out in the income statements, we get additional revenue from providing the payment service. We have a variable cost related to that sitting in sales and other, which is where you see the biggest offsetting a cost element to offset – to match the revenue. There are some incremental expenses, obviously, in our other lines as well related to running the payments program, but the biggest variable cost is sitting in sales and other. As we mentioned, in 2020, the payments business operated very close to breakeven when factoring particularly variable costs into account, which is an improvement from what it was before. And it's obviously an enabler for business, as Glenn just articulated. So, we want to continue to grow the mix and maintain that breakeven profile as we're growing it out, recognizing that, in the future, we recognize there are monetization opportunities that can lead to incremental EBITDA from the payments business, which we expect, albeit at lower margin rates than core accommodations. Operator: Your next question comes from the line of Douglas Anmuth from J.P. Morgan. Dae Lee: This is Dae on for Doug. Thanks for taking the questions. My first one is on your alternative accommodation product. You've talked about works needed to improve the product in the US. Is that just inventory and awareness that you've talked about in the past? Or are there other areas where you see opportunities to improve? And then, just on the room night growth and booking growth, it seems like there's been a sizable divergence in trajectory. Kind of feel anything else notable that's driving that and how should we think about the relationship between the two going forward? Glenn Fogel: I'll take the first and, Dave, why don't you take the second? So, in terms of the alternative accommodations in the States, the things you mentioned are very, very important. We've got to have the right properties for the customer. And I've talked about this in the past that we under-index with the private homes, the single homes in the States. And that has been a popular product in the States because of the pandemic. And that's something that we are continuing to work on in the future. It's also just the process in general, how we get people on board, who we're dealing with to get them to come in. And we currently are using the multi-product property managers more than, say, some of our competitors who go out and get individual properties. So, there's a difference in how we're doing it right now. I do believe this is a very, very achievable goal to be as competitive as anybody else. As David mentioned earlier about mix, we do a great business in Europe in the alternative accommodations area. A very good business. And there's no reason we shouldn't be able to do the exact same thing here in the States, though it is taking time. David Goulden: On what's going on between the dynamic between room night growth and booking growth, a couple of factors going on here. One, I mentioned the fact that we're doing – that we're seeing better booking growth performance from flights because of volume. And also, we are doing – even though the units are down for 4% to 6% in car, there's actually fairly good increase in rates for cars. So total bookings, the TGV, has done better for both flights and cars than it did for accommodations. But the biggest factor is really what's going on with ADRs. And there has been a bit of a shift in what we've seen even in the last couple of months. And we are – saw that ADRs in the quarter were only down 1%. Now, I would say a couple of things. Now, the like-for-like ADRs are absolutely still under pressure due to lower occupancy rates. But there are some mix benefits that really impact the year-on-year comparison. The first mix benefit was the mix shift towards the US as the US really started to accelerate, particularly in March. You saw a really fast pickup in growth rates in March that we were not forecasting when we last met you. So, that was a positive for room night growth, but also for ADRs. And also in Europe, what's happening is, right now, because there are still a lot of restrictions, people booking today are booking generally more often for the summer holiday and the summer holiday period in Europe has higher ADRs than most short-term stays. So, those two mix effects are really helping the ADR picture. And we expect this – both the phenomena that I talked about in terms of air and car and ADRs are likely to go through to Q2 as well. But we do think the ADRs will start to be driven down again in the second half due to a couple of reasons. Again, the like-for-like ADRs are under pressure. As an example, our stay ADRs in the first quarter were down mid-teens if you exclude regional mix. That's more of a kind of like-for-like comparison. So, that like-for-like comparison is more likely to kind of be exposed in the second half. Regional mix may continue to help. But then, we do think that this earlier booking of the summer – benefit of the summer bookings will fade and the reported ADRs will become more comparable with the underlying stay ADRs and those will converge back together more in the second half than they did in the first half. So, some interesting phenomena going on with mix and with booking window in Europe driving what we're going to see in Q1 and Q2. Operator: And your last question comes from the line of Deepak Mathivanan from Wolfe Research. Deepak Mathivanan: Just a couple ones. So, first, wanted to go back to your comment about investing to gain share with the margin opportunity? How should we think about your approach strategically? Is it on variable marketing channels? Obviously, there's a few products that you have talked about before, but are there any other initiatives that you would know that's something that could be impactful during this recovery period? And then the second question is on the labor market situation here in the US. Obviously, it is very tight. And some of the hotel operators have called out the challenges there as well. How do you think this affects your business, if at all? Maybe broadly, talk about how supply side is evolving during the recovery. Glenn Fogel: I'll start with the second part, labor. And I'll let David go back to margins and how things can look as we continue to go for the future. So, certainly, we've all read news articles about shortages right now popping up in different areas of the hospitality industry. And some of the leaders in the industry, particularly some of the hotels and restaurants saying just can't get workers. But I don't believe that's going to impact where people aren't going to be able to find a place to stay at all. Right now, there is no shortage in my mind of great places for people to go to. And I don't see that happening. Yes, some property types may be short at certain times during high season, particularly, some of the very popular areas in the summer as leisure comes back in some parts of the world. But overall for the business, I don't see this as a significant or even a small risk to the business at all. And Dave, you can talk a little bit about margin. David Goulden: Clearly, in a business like ours, there's always a trade-off between growth and profitability or growth and margins, particularly in the short term. And the areas that we would expect to be leaning into, there are a number of initiatives that we can drive to – lean into to drive further growth. Obviously, we need to be smart and we need to be nimble, we need to look at where the pockets of opportunity are. But we continue to be, I think, a very good marketeer in the pay channels and look at those demand opportunities and really have the opportunity to lean into those where we think we can and where we think we can actually gain incremental traffic. We can do things with merchandising, and we can also do things with things like promotions, like back to travel. Also, there are areas like brands. So, there are multiple levers we can pull to drive growth above market where we believe there are opportunities to do so. We believe that the recovery obviously presents a very dynamic environment for everybody. And we want to make sure that we are taking advantage of opportunities that we can either make or made for us. And those are the things that would, in the short term, impact margins. Bear in mind, as we talked about what's happening this year, during periods of time when bookings are growing faster than revenue, that impacts the business because, generally, our expenses are associated upfront with capturing the booking and the revenue comes later. So those are all things that go into the dynamics around growth versus margin in the accommodation business. Operator: Thank you, everyone. And that's all the questions that we have for today. I'll turn the call over back to our CEO, Glenn Fogel, for any closing remarks. Glenn Fogel: Thank you. So, in closing, I want to thank our partners, our customers, our dedicated employees and our shareholders. We appreciate your support as we continue to navigate through these better, though still difficult times, and we want to continue to build on the long-term vision for our company. Thank you. Thank you, everyone, and please be safe. Good night. Operator: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now all disconnect.
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Booking Tops Q1 Estimates as Room Nights and Bookings Drive Strong Start to 2025

Booking Holdings (NASDAQ:BKNG) delivered a blowout first-quarter performance, with earnings and revenue far exceeding analyst expectations, fueled by solid growth in travel demand across its global platform.

The company reported earnings per share of $24.81, crushing the consensus estimate of $17.45. Revenue rose 8% year-over-year to $4.76 billion, beating projections of $4.59 billion. On a constant currency basis, revenue growth reached 10%.

Room nights and gross bookings both increased 7% compared to the prior year, with bookings climbing 10% when adjusted for currency impacts. The results reflect continued strength in global travel demand and the company's broad geographic diversification.

Booking Holdings Inc. (NASDAQ:BKNG) Shows Promising Growth and Financial Health

  • Booking Holdings Inc. (NASDAQ:BKNG) has experienced a modest gain of 1.23% in the past 30 days, showcasing steady market resilience.
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Booking Holdings Inc. (NASDAQ:BKNG) is a leading player in the online travel industry, providing services through its well-known brands like Booking.com, Priceline, and Agoda. The company facilitates travel reservations, including hotel stays, car rentals, and airline tickets. It competes with other major online travel agencies such as Expedia Group and TripAdvisor.

In the past 30 days, BKNG has shown a modest gain of 1.23%, indicating a steady upward trend. This performance reflects investor confidence and market resilience, despite a recent 10-day decline of 3.87%. Such a pullback might present a buying opportunity for investors who believe in the stock's potential rebound.

BKNG's growth potential is robust, with an estimated stock price growth of 15.74%. This suggests that the stock is currently undervalued, offering room for appreciation. Growth-oriented investors may find this particularly attractive, as the stock's fundamentals support its potential for future gains.

The company's financial health is strong, as evidenced by a Piotroski Score of 8. This score indicates solid profitability, liquidity, and operational efficiency, making BKNG a financially sound investment. The Piotroski Score is a tool used to assess a company's financial strength, with higher scores indicating better financial health.

Analysts have set a target price of $5,156.25 for BKNG, reflecting a consensus on the stock's fair market value. This target suggests significant upside from its current trading levels, reinforcing the stock's attractiveness to investors. As always, potential investors should consider their risk tolerance and conduct thorough research before investing.

Booking Gains 3% After Strong Q4 Earnings and Dividend Hike

Booking Holdings (NASDAQ:BKNG) rallied more than 3% intra-day today after reporting fourth-quarter results that exceeded analyst expectations, driven by robust travel demand and higher-than-expected bookings.

For the quarter, the online travel giant posted adjusted earnings per share of $41.55, far surpassing analyst estimates of $36.13. Revenue came in at $5.47 billion, exceeding the $5.19 billion forecast.

Booking activity remained strong, with room nights rising 13% year-over-year to 261 million, while gross bookings climbed 17% from the same period last year, reflecting continued strength in global travel trends.

On top of the strong performance, Booking increased its quarterly dividend by 10% to $9.60 per share, signaling confidence in its future growth and commitment to returning capital to shareholders.

Booking Holdings Inc. (NASDAQ:BKNG) Earnings Preview: What to Expect

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Booking Holdings Inc. (NASDAQ:BKNG) is a leading player in the online travel industry, offering services such as hotel reservations, car rentals, and airline ticket bookings. As the company prepares to release its fourth-quarter 2024 earnings on February 20, 2025, Wall Street is keenly watching the anticipated figures. Analysts estimate an earnings per share (EPS) of $35.82 and project revenues to be around $5.18 billion.

The Zacks Consensus Estimate suggests a slightly lower EPS of $35.75, reflecting an 11.72% increase from the previous year. This growth is attributed to strong performance in gross bookings, hotel room nights sold, and airline ticket units sold. Despite a 2.8% downward revision in the EPS estimate over the past month, Booking Holdings has a track record of surpassing earnings estimates, with an average surprise of 16.75% over the last four quarters.

Revenue projections for Booking Holdings stand at $5.19 billion, marking an 8.59% increase from the same quarter last year. This growth is indicative of the company's robust business model and its ability to capitalize on the recovering travel industry. The price-to-earnings (P/E) ratio of approximately 34.1 and a price-to-sales ratio of about 7.38 reflect the market's confidence in the company's earnings and revenue potential.

Investors are particularly interested in how the actual results will compare to these estimates, as any deviation could significantly impact the stock's price. A positive earnings surprise could lead to a rise in BKNG's stock price, while a miss might result in a decline. The management's discussion during the earnings call will be crucial in assessing the sustainability of any immediate price changes and future earnings projections.

Booking Holdings' financial metrics, such as an enterprise value to sales ratio of 7.42 and an enterprise value to operating cash flow ratio of 19.12, provide insights into the company's valuation relative to its cash flow. The earnings yield of about 2.93% offers a perspective on the return on investment. Despite a negative debt-to-equity ratio of -4.58, the company's current ratio of approximately 1.23 indicates its ability to cover short-term liabilities with short-term assets.

Booking Holdings Earns an Upgrade at Benchmark

Benchmark analysts upgraded Booking (NASDAQ:BKNG) to Buy from Hold, setting a new price target of $4,700 per share. The analysts highlighted the decision to align the rating with their positive long-term outlook for the company, despite current economic uncertainties and anecdotal reports of spending reductions in key European markets.

The analysts cited increased resilience in EMEA regions, better-than-expected growth in APAC, and growth in Latin America as key factors boosting confidence in Booking Holdings' potential to outperform consensus estimates over the next 18 months. Additionally, they noted that the company is expected to continue gaining market share, with further expansion anticipated in North America.

The new price target of $4,700 per share is based on a multiple of 20 times the estimated 2025 cash EPS of $235, or 16 times adjusted EBITDA.

Booking Stock a Strong Buy at Tigress Financial

Tigress Financial Partners analysts raised Booking Holdings (NASDAQ:BKNG) price target to $4,285.00, maintaining a Strong Buy rating. The analysts highlighted Booking's advantageous position in the travel and entertainment sector and its effective use of generative AI to drive revenue growth. They noted the company's significant increases in various revenue streams, including a 21% year-over-year rise in total revenues to $7.3 billion in Q3.

The report also showed substantial growth in gross travel bookings and a strong performance in room nights, rental car days, and airline tickets. Booking Holdings has also launched an AI Trip Planner, utilizing ChatGPT and OpenAI's technology, enhancing its travel planning services.

The analysts commended the company's market leadership, technological advancements, and strategic acquisitions, which contribute to growing shareholder value. They anticipate a potential return of over 20% from the current levels with the new price target.

Booking Stock Gains 4% on DA Davidson Upgrade

DA Davidson analysts upgraded Booking Holdings (NASDAQ:BKNG) to Buy from Neutral, maintaining a $3,400 price target. As a consequence, shares rose more than 4% intra-day today.

Following a recent stock dip and a strong Q3/23 performance, the analysts see potential in continued leisure travel demand and the company's cost management.

Despite increasing 2024 revenue and EBITDA estimates, the price target is based on DCF (discounted cash flow), implying a 14.5x 2024 EV/EBITDA. Booking Holdings is currently trading at an 11% discount to its five-year average P/E multiple.