Booking Holdings To Trade Higher Post Q1 Results?

BKNG: Booking Holdings logo
Booking Holdings

Booking Holdings (NASDAQ: BKNG), the world’s largest online travel agency that offers services from lodging to airline tickets to car rentals, is scheduled to announce its fiscal first-quarter results on Wednesday, May 4. We expect the company’s stock to likely trade higher with revenues and earnings beating market expectations. We expect BKNG’s ongoing investment in alternate accommodation, payments, flights, and merchandising to help it gain a share of the broader travel market in the long term. In addition, the company’s structurally higher profitability, as compared to the pre-pandemic levels, looks like a win for the company.

Booking Holdings derives a majority of its revenue from the European market, which has undertaken a series of economic measures in response to Russia’s invasion of Ukraine. To add to that, a decline in travelers from Russia, who are currently under a ban, could also have a modest impact on BKNG’s business in the upcoming quarters.

Our forecast indicates that Booking Holdings’ valuation is $2328 per share, which is 5% higher than the current market price. Look at our interactive dashboard analysis on Booking Holdings Earnings Preview: What To Expect in Q1? for more details.

(1) Revenues expected to be marginally above the consensus estimates

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Trefis estimates Booking Holdings’ Q1 2022 revenues to be around $2.6 Bil, a slight increase from the consensus estimate level. The company reported revenues of $3 billion, up 140% year-over-year (y-o-y) in fiscal Q4. By the looks of things, travel is recovering well from the pandemic-driven restrictions in 2020. It should be noted that the fourth-quarter revenue was still about 10% lower than the $3.3 billion the company reported in the same quarter two years ago. In addition, Booking Holdings’ gross bookings were 160% higher in Q4, driven by strong demand in both agency and merchant channels. To add to this, the company’s room nights were higher by 100% y-o-y, rental car days grew 36% y-o-y, and airline tickets were up 108%. Despite the negative impact on travel from the Omicron wave at the end of the fourth quarter, adjusted EBITDA was better than expected and came in at $940 million compared to $38 million a year ago.

For the full-year 2022, we expect Booking Holdings revenues to grow 49% y-o-y to $16.3 billion.

(2) EPS likely to be in line with consensus estimates

Booking Holdings’ Q1 2022 earnings per share (EPS) is expected to come in at $1.80 as per Trefis analysis, comfortably beating the consensus estimate. The year-over-year recovery in revenue translated to much better profitability, with net income climbing back to $618 million compared to the year-ago loss of $165 million in Q4 2021. 

(3) Stock price estimate higher than the current market price

Going by our Booking Holdings’ Valuation, with an earnings per share estimate of around $92.11 and a P/E multiple of 25.3x in fiscal 2022, this translates into a price of $2328, which is 5% higher than the current market price.

It is helpful to see how its peers stack up. BKNG Peers shows how Booking Holdings stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns May 2022
MTD [1]
YTD [1]
Total [2]
 BKNG Return -1% -9% 50%
 S&P 500 Return 1% -13% 86%
 Trefis Multi-Strategy Portfolio 0% -17% 228%

[1] Month-to-date and year-to-date as of 5/3/2022
[2] Cumulative total returns since the end of 2016

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