Stock Spotlight

Booking Holdings added to Focus List

 

When you ask Americans about online travel agencies, they’ll likely cite names like Expedia ($179; EXPE) and Airbnb ($134; ABNB), popular sites with massive U.S. followings. But Booking Holdings ($4,977; BKNG), which owns Priceline and other brands, leaves them in the dust when it comes to market power.

Booking’s namesake brand, booking.com, is the world’s largest online travel agency, with a global market share of about 25% for hotel bookings, and a European share estimated at 70%. Even in the U.S., Booking Holdings’ portfolio of online travel agencies is only slightly behind Expedia Group’s 19% share, according to BusinessOfApps.com. Booking generates nearly twice Expedia’s revenue and four times its profits, and also has seven times its stock-market capitalization.

Over the last five years, dating back to before the pandemic, Booking posted annualized growth of 9% for sales, 12% for per-share profits, and 10% for operating cash flow. That consistent growth has contributed to Quadrix® ranks of 91 for Momentum and 99 for Quality.

Analysts expect the company to continue growing profits (consensus gains of 14% to 17% for 2024 through 2026), supported by revenue increases (consensus gains of 7% to 9% for 2024 through 2026). Booking, which yields 0.7%, is being upgraded to a Focus List Buy.

Big and strong

Booking Holdings has massive global reach. For example, Booking boasts:

• More than 29 million listings of homes, apartments, and other places to stay, at about 3.4 million properties.

• Operations in more than 220 countries, with online interfaces in more than 40 languages.

• More than 1 billion room nights booked in 2023, with total travel bookings above $150 billion.

• Five primary consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable.

Booking’s room nights booked rose 8% in the first nine months of 2024, with rental car days up 16% and airline tickets 39% in the September quarter. The North American travel market remains steady, if somewhat slow, while Asia is booming and Europe is on the rise. Long term, we remain optimistic about the industry’s growth. Statista projects the online-travel market will grow to $808 billion by 2028, up from $658 billion this year.

Parting shot

We get comments from some subscribers concerned that they cannot afford to buy large positions in a stock that trades above $4,000 per share. Please keep in mind that today’s market environment doesn’t offer any compelling reason to buy stocks in round lots of 100 shares, or even in batches of 10. If you’re buying stock in chunks of $3,500 or more, don’t rule out Booking just because of its stock price.

Booking Holdings Inc., 800 Connecticut Ave., Norwalk, CT 06854, (203) 299-8000, www.bookingholdings.com.

 

 

 

 

Quadrix Scores

 

* Earnings exclude special items.
NA Not Available.
Quadrix® scores are percentile ranks, with 100 the best.
e Dividend and yield estimated.