Stock (Symbol) |
Booking Holdings (BKNG) |
Stock Price |
$2160 |
Sector |
| Retail & Travel |
Data is as of |
| March 23, 2022 |
Expected to Report |
| May 3 |
Company Description |
 Booking Holdings Inc. is a provider of travel and restaurant online reservation and related services. The Company offers its services through six consumer-facing brands: Booking.com, priceline.com, agoda.com, Rentalcars.com, KAYAK and OpenTable, Inc. (OpenTable). Through the Company’s brands, consumers can: book a range of accommodations, including hotels, motels, resorts, homes, apartments, bed and breakfasts, hostels and other properties; make a car rental reservation or arrange for an airport taxi; make a dinner reservation; book a flight, cruise, vacation package, tour or activity. Booking.com offers accommodation reservation services for approximately 2,373,000 properties in over 220 countries and territories, and in over 40 languages. Source: Refinitiv |
Sharek’s Take |
 Booking (BKNG) could see unparalleled demand for travel this Summer as American families travel once again. And that “unparalleled” statement came from Delta Air Lines President when speaking with The Wall Street Journal about airline demand. What’s nice about Booking is the website handles more than airlines. It allows travelers to book hotel rooms and rental cars as well. I love using Priceline to book my trips, as the website often has special deals on hotels. With COVID-19 now behind us, people are going to travel this Summer. I think revenue will surge on Priceline and Booking, and the stock could become one of the top stocks of 2022.
Booking is the world leader in online travel and related services. One of the best Internet acquisitions ever was when Priceline acquired Bookings BV in 2005, which got PCLN a piece of the underdeveloped European online travel industry. Booking went on to become a catalyst as in two years (2005 Q3 to 2017 Q3) Domestic qtrly bookings grew from $378 million to $602 million (+59%) while International revenue ballooned from $156m to $758m (+380%). In February 2018 Priceline formally changed its name (and stock symbol) to Booking (BKNG). In December 2021, the company acquired Getaroom as part of their efforts to expand Priceline’s current strategic partnerships business. Getaroom is a B2B-focused distributor of hotel rooms, primarily servicing leisure demand through about 150 affiliate partners primarily in the North American market. Later in 2022, BKNG also has plans to acquire Etraveli for €1.6 billion. Etraveli is one of the largest flight-centric online travel agencies and is a leader in flight booking technology. Booking.com and Etraveli have been successfully partnering over the last two years, with Etraveli powering Bookings flight products. The company’s business is now 88% International, and consists of Booking.com, agoda, Rentalcars.com, and the International businesses of KAYAK and OpenTable. The company now has six distinct brands:
Booking stock is truly a Blue Chip stock. I’ve owned it since 2006 and profits hit record highs every year up until 2019. BKNG currently has an Estimated Long-Term Growth rate of 43%, but this stock was considered a 12% to 15% grower before COVID-19. Although management doesn’t pay a dividend, it has bought back shares in past years. Management bought back $8 billion in stock in 2019 but halted stock buybacks in 2020, dramatically reduced marketing, and reduced staff by 23% as COVID crimped travel. BKNG is part of my Conservative Growth Portfolio. I recently added to my position, and its now one of the top holdings in the portfolio. |
One Year Chart |
 BKNG stock was about to break out to new highs, then fell down following Russia’s attack on Ukraine. Now the stock seems poised to break out above $2250.
The P/E is 24 and that’s very reasonable. Also, I think profit estimates are too low with consumers showing unparalleled demand for travel. The Est. LTG of 43% is way too high, but this is a profit growth estimate for the next 3-5 years and profits are abnormally low right now. |
Earnings Table |
 Last qtr, Booking Holdings generated 2877% profit growth and exceeded expectations of 2482%. But the company delivered a loss a year-ago, so comparisons were super easy. Revenue jumped 141%, year-over-year driven by higher Average Daily Rates. Mobile bookings accounted for 2/3 of total room nights.
Sales performance was driven by a partial recovery in cross-border travel within the European region and domestic travel in Europe, strong demand for airline tickets in Priceline and Bookings.com, and increase in the use of Booking.com’s payment platform. The U.S. continued to have strong growth last qtr, while Asia was still down considerably, and the rest of the world was down modestly. BKNG saw room nights trends improving throughout January and continuing into February. Overall, room nights in the first half of February were about in line with 2019 levels, and gross bookings were higher. Annual Profit Estimates declined a bit this qtr, and that’ a direct result from the war. Qtrly Profit Estimates are for 127%, 835%, 23%, and 39% profit growth the next 4 qtrs. |
Fair Value |
 My Fair Value P/E for this stock is 28. Notice profit estimates for 2024 are $146.28. I think the stock is worth ~$2500 this year with the potential to reach ~$3500 next year. |
Bottom Line |
 Booking (BKNG) was once rapid growth stock that has since evolved into a Blue Chip stock. I originally bought the stock for investors in May 2006 $29, sold at $83 in March 2009 then jumped back in during May 2009 at $105 and have stuck with it since.
With COVID-19 now behind us, people are craving to travel, and that could mean Booking doing better than analysts expect. I think BKNG’s profits could surge higher during the next year. BKNG ranks #1 in the Conservative Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 1 of 34 |
