Buy or Wait on Booking Holdings?
Booking Holdings (NASDAQ: BKNG) outperformed a weak market in 2025, with its stock rising 3% despite a 5% drop in the S&P 500. The company reported strong Q1 results, with revenue up 8% year-over-year to $4.76 billion, beating the $4.59 billion estimate. Adjusted EPS jumped 22% to $24.81, far exceeding the $17.45 consensus. Gross bookings and room nights each rose 7%, and adjusted EBITDA grew 21% to $1.1 billion, driven by global diversification and growth in alternative accommodations and flight bookings. Despite the seasonally slower quarter, Booking’s international focus—accounting for almost 90% of revenue—helps insulate it from U.S. macroeconomic pressures faced by peers like Airbnb.
Image by Edeltravel_ from Pixabay
How does Booking’s valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, BKNG stock looks slightly expensive compared to the broader market.
• Booking has a price-to-sales (P/S) ratio of 6.8 vs. a figure of 2.8 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 19.5 compared to 17.6 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 31.7 vs. the benchmark’s 24.5
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How have Booking’s revenues grown over recent years?
Booking’s Revenues have seen notable growth over recent years.
• Booking has seen its top line grow at an average rate of 30.7% over the last 3 years (vs. increase of 6.2% for S&P 500)
• Its revenues have grown 11.1% from $21 Bil to $24 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues grew 7.7% to $4.8 Bil in the most recent quarter from $4.4 Bil a year ago (vs. 4.9% improvement for S&P 500)
How profitable is Booking Holdings?
Booking’s profit margins are much higher than most companies in the Trefis coverage universe.
• Booking’s Operating Income over the last four quarters was $7.6 Bil, which represents a high Operating Margin of 31.8% (vs. 13.1% for S&P 500)
• Booking’s Operating Cash Flow (OCF) over this period was $8.3 Bil, pointing to a high OCF Margin of 35.1% (vs. 15.7% for S&P 500)
• For the last four-quarter period, Booking’s Net Income was $5.5 Bil – indicating a high Net Income Margin of 22.6% (vs. 11.3% for S&P 500)
Does Booking look financially stable?
Booking’s balance sheet looks very strong.
• Booking’s Debt figure was $17 Bil at the end of the most recent quarter, while its market capitalization is $166 Bil (as of 4/30/2025). This implies a strong Debt-to-Equity Ratio of 10.5% (vs. 21.5% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $16 Bil of the $27 Bil in Total Assets for Booking. This yields a very strong Cash-to-Assets Ratio of 59.3% (vs. 15.0% for S&P 500)
How resilient is BKNG stock during a downturn?
BKNG stock has seen an impact that was worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• BKNG stock fell 37.2% from a high of $2,616.41 on 18 February 2022 to $1,643.21 on 30 September 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 2 May 2023
• Since then, the stock has increased to a high of $5,300.34 on 8 December 2024 and currently trades at around $5100
Covid Pandemic (2020)
• BKNG stock fell 44.8% from a high of $2,086.90 on 10 January 2020 to $1,152.24 on 23 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 9 November 2020
Global Financial Crisis (2008)
• BKNG stock fell 66.3% from a high of $139.66 on 13 May 2008 to $47.07 on 6 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 10 August 2009
Putting all the pieces together: What it means for BKNG stock
In summary, Booking’s performance across the parameters detailed above are as follows:
• Growth: Very Strong
• Profitability: Very Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Weak
• Overall: Very Strong
Based on the above parameters, we think that the stock is attractive, which supports our conclusion that BKNG is a good stock to buy.
While BKNG stock looks promising, investing in a single stock can be risky. You could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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