Can Booking Holdings Stock Jump 40%?

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Shares of Booking Holdings (BKNG) have lost 26.4% over the past year, while the S&P 500 returned 11.3%. For the stock to climb 40% from here, the company must be a sound business navigating a spell of pressure on travel, rather than one that has stopped delivering. In five of the last ten calendar years, the stock climbed 40% or more at some point within the year. The shares now trade at 15.8 times earnings, compared with 22.6 for the median S&P 500 company. Is that low price backed by a business that is still earning more?

Booking Holdings’ Operating Profit Is Still Rising

Yes, so far. Operating profit reached $9.74 billion in the twelve months to June 2026, up from $8.22 billion a year earlier. Fiscal Q2 2026 operating profit also increased, rising to $2.5 billion from $2.25 billion. Over those twelve months, the company posted an operating margin of 34.5%, compared with 18.7% for the median S&P 500 company.

The company sells room nights, flight tickets and attraction tickets to travelers. Room nights grew 5% in fiscal Q2 2026, topping management’s guidance. Free cash flow held up too, totaling $9.54 billion over the twelve months to June 2026, against $9.24 billion a year earlier. So the discount is on profit and cash that are still growing.

Why Has Booking Holdings’ Growth Slowed?

Management points to the conflict in the Middle East: on its August 4, 2026 call, it said higher airline prices and reduced flight capacity kept long-haul international travel under pressure. Fiscal Q2 2026 revenue grew 8.1%, about half the 16.2% rate from the prior quarter. International room nights rose only slightly, while domestic room nights grew high single digits.

Over the twelve months to June 2026, the slowdown looks smaller. Revenue grew 12.9%, compared with an average of 13.5% for the last three twelve-month periods, this one included. Management expects slower growth still, guiding revenue growth of 4% to 6% for fiscal Q3 2026 on the assumption that the conflict’s effects on flights last through that quarter. The company also lowered its full-year gross bookings expectation, mainly because of slower flight ticket growth.

Not all of the pressure comes from the conflict. Management said changes in how Google displays search results have put some pressure on unpaid search traffic, and that adding Google’s AI overview probably did so as well. It called that traffic a small part of its room nights.

What Is Booking Holdings Doing About The Slowdown?

Booking is cutting costs and buying back its own stock. Management raised the annual savings it expects from its cost program to about $650 million, from about $550 million, with most of the extra coming in 2027. The quarterly operating margin was 34.0% in fiscal Q2 2026, compared with 33.1% in fiscal Q2 2025.

Booking also bought back $7.4 billion of its stock in the first half of 2026. The company paid about $173 a share on average, against a latest close of $148.13. It spent $10.5 billion on buybacks over the twelve months to June 2026, which was more than it made in free cash flow, and total debt rose to $20.7 billion, from $19.0 billion a year earlier. For full-year 2026, management expects reported revenue up high single digits and adjusted earnings per share up low to mid-teens.

So a buyer at today’s price is betting that the market has mispriced a sound business going through a spell of pressure on flights and on unpaid search traffic, rather than betting that Booking is fixing a broken one. Booking’s profit and cash are still growing; whether its revenue growth recovers once that pressure eases is not yet known. When the company reports, expected in November 2026, Booking’s revenue growth for fiscal Q3 2026, against the 4% to 6% management guided, is the number to watch. Booking has said it will hold that results call on November 3, 2026.

How To Act On BKNG?

Not necessarily on Booking Holdings alone, if your goal is long-term wealth. Wealth is built by owning the companies that keep outperforming, the leaders of their industries, wherever they are. Here are two companies from Booking Holdings’ own industry that have beaten it. Over the five years to October 2026, Royal Caribbean stock rose 276% and Lindblad Expeditions stock rose 150%, while Booking Holdings stock rose 57%.

Finding companies like these takes comparison across industries and sectors, and that is what the Trefis High Quality (HQ) Portfolio does. It holds 30 quality companies in equal weight and, since its inception in September 2020, has returned more than 105%, ahead of a benchmark that combines the S&P 500, S&P Mid-cap and Russell 2000. See how we find the leaders.

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