BKNG Stock Report

Ticker: BKNG

Price: $2365.27

Position: Bullish — OUTPERFORM

Price Target: $2732.75

Company Overview

Booking Holdings Co. is a company based out of Norwalk, Connecticut that specializes in travel and restaurant reservations online as well as other related tourist-related services worldwide. Founded in 1997, The company runs multiple websites, all of which funnel back into its travel operations. Booking.com, which offers online accommodation reservations and tourist attractions; Rentalcars.com that provides online rental car reservation services; Priceline, which offer online travel reservation services, including hotel, rental car and airline ticket reservation services, as well as vacation packages and cruises; and Agoda that provides online accommodation reservation services, as well as flight, ground transportation and activities reservation services. Booking Holdings also sees over KAYAK, an online price comparison tool 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. Booking’s company values include diversity — the company reports more than 50% of employees are women — and innovation — Booking constantly seeks to improve their existing products while developing new products and services to cater to the needs of their customers. The company was formerly known as The Priceline Group Inc. and changed its name to Booking Holdings Inc. in February 2018.

Growth Catalyst

Booking Holdings was a company whose outlook during the pandemic, and it’s coinciding travel dead period, soured greatly. Travel bans to and from the United States hampered Booking’s largest market, as the operational shutdown came to a head when Booking’s fourth quarter report showed a $9 billion loss in total revenue from 2019 yoy. Historically, Booking Holdings ends the year well with the uptick in travel brought about by the holiday seasons; as such, the opportunity for growth in Q4 is immense for Booking Holdings. Many who were not able to travel last year for the holidays will have the wherewithal and desire to see loved ones and/or bucket-list destinations to compensate for last year’s government-enforced shutdown. However, the travel boom’s delay imposed by the more contagious Delta variant means the ongoing economic recovery has yet to fully price itself into Booking’s stock price. The result is that Booking Holdings is currently trading 13.4% below my calculated fair value of its stock. Trefis, an interactive financial community structured around trends, estimates gross bookings to rise from $24.5 billion in 2020 to $33 billion in 2021 and to over $50 billion in 2022. Additionally, the graph above shows Nasdaq’s estimated earnings and revenue growth through 2023, indicating Booking is slated to rebound strongly from the pandemic lull. Forecasts published by Nasdaq analysts estimate a 117.81 consensus diluted EPS for the end of 2023.

Investment Rationale

Potential Downsides

Company Mkt. Cap($) P/E LTM EV/EBITDA LTM %EBITDA Margin LTM

BKNG….. ..100.84B …….244.16x….. …98.6x ………………12.24%(Q2)

EXPE…… ..25.61B……… -16.47x…….. -49.2x……………… 7.62%(Q2)

ABNB……. 108.76B…….. -10.8x ………-35.7x…………….. -102.01%

Technical Analysis

Sources: SeekingAlpha, Wall Street Journal, Nasdaq, Statista, Simply Wall Street, Finbox

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