Booking Holdings (BKNG) AI Stock Analysis

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Booking Holdings

(NASDAQ:BKNG)

72Outperform

Booking Holdings demonstrates strong financial growth and promising earnings outlook, buoyed by strategic advancements and robust earnings performance. However, negative equity and technical indicators suggest cautious optimism. Valuation is fair, with potential for growth if challenges are managed.

Positive Factors

Demand and Growth

BKNG shows healthy underlying demand, with no sign of macro pressure in data, suggesting resilience in various economic conditions.

Financial Performance

Booking Holdings reported strong 4Q results beating expectations on both the top and bottom line.

Market Position

Booking Holdings is 30% larger than its main competitors Airbnb and Expedia combined, with room nights growing well above the industry average.

Negative Factors

Growth Deceleration

Despite positive trends, there is a modest deceleration in BKNG's reservation volume from +8% in previous quarters to +5% currently.

Macroeconomic Impact

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

$140.58B

Dividend Yield0.84%

Average Volume (3M)301.87K

Price to Earnings (P/E)24.8

Beta (1Y)1.12

Revenue Growth11.11%

EPS Growth47.03%

CountryUS

Employees24,057

SectorConsumer Cyclical

Sector Strength63

IndustryTravel Services

Share Statistics

EPS (TTM)173.02

Shares Outstanding32,815,200

10 Day Avg. Volume273,359

30 Day Avg. Volume301,867

Financial Highlights & Ratios

PEG Ratio0.53

Price to Book (P/B)N/A

Price to Sales (P/S)6.38

Price to Cash Flow (P/CF)52.50

P/FCF Ratio52.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$5,570.90

Price Target Upside30.04% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering31

Booking Holdings Business Overview & Revenue Model

Company DescriptionBooking Holdings Inc. provides travel and restaurant online reservation and related services worldwide. The company operates Booking.com, which offers online accommodation reservations; Rentalcars.com that provides online rental car reservation services; Priceline, which offer online travel reservation services, and consumers hotel, flight, and rental car reservation services, as well as vacation packages, cruises, and hotel distribution services. It also operates Agoda that provides online accommodation reservation services, as well as flight, ground transportation and activities reservation services. In addition, the company operates KAYAK, an online price comparison service that allows consumers to search and compare travel itineraries and prices, comprising airline ticket, accommodation reservation, and rental car reservation information; and OpenTable for booking online restaurant reservations. Further, it offers travel-related insurance products, and restaurant management services to consumers, travel service providers, and restaurants. The company was formerly known as The Priceline Group Inc. and changed its name to Booking Holdings Inc. in February 2018. The company was founded in 1997 and is headquartered in Norwalk, Connecticut.

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 shows robust revenue growth and profitability with a strong income statement. However, the balance sheet's negative equity poses financial risks, despite strong cash flow and leverage improvements. The overall financial performance is positive but needs attention to long-term financial health.

Income Statement

Very Positive

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.

Balance Sheet

Neutral

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Negative

Last Price4284.02

Price Trends

50DMA

4745.76

Negative

100DMA

4881.14

Negative

200DMA

4434.71

Negative

Market Momentum

MACD

-29.68

Negative

RSI

49.69

Neutral

STOCH

55.94

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BKNG, the sentiment is Negative. The current price of 4284.02 is below the 20-day moving average (MA) of 4557.71, below the 50-day MA of 4745.76, and below the 200-day MA of 4434.71, indicating a bearish trend. The MACD of -29.68 indicates Negative momentum. The RSI at 49.69 is Neutral, neither overbought nor oversold. The STOCH value of 55.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BKNG.

Booking Holdings Risk Analysis

Booking Holdings disclosed 34 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 (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABNB	78 Outperform	$67.25B	25.80	31.95%	―	11.95%	-44.02%
EXPE	75 Outperform	$18.28B	15.86	79.84%	0.28%	6.64%	69.85%
BKNG	72 Outperform	$140.58B	24.81	-146.32%	0.84%	11.11%	47.03%
HLT	72 Outperform	$50.04B	34.01	-41.19%	0.29%	9.17%	42.78%
TCOM	67 Neutral	$40.88B	16.23	12.91%	0.50%	18.12%	69.44%
Sector *	59 Neutral	$11.20B	10.09	-1.41%	3.96%	1.31%	-16.95%
MAR	55 Neutral	$59.09B	25.77	-144.82%	1.17%	5.85%	-18.43%

* Consumer Cyclical Sector Average

Performance Comparison

BKNG

Booking Holdings

4,284.02

712.68

19.96%

TCOM

Trip.com Group Ltd. Sponsored ADR

55.89

7.29

15.00%

EXPE

Expedia

141.86

9.98

7.57%

MAR

Marriott International

214.58

-37.56

-14.90%

HLT

Hilton Worldwide Holdings

208.85

-2.18

-1.03%

ABNB

Airbnb

106.66

-53.61

-33.45%

Booking Holdings Earnings Call Summary

Earnings Call Date: Feb 20, 2025 | % Change Since: -14.46% | Next Earnings Date: Apr 29, 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.