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Does BKNG's Strong Growth Prospect Make the Stock Worth Buying?

Booking Holdings BKNG is riding on a strong travel demand environment. The growing momentum across its consumer-facing brands, including Booking.com, Priceline, Agoda, KAYAK, and OpenTable, is a positive.

It is leveraging Generative AI (GenAI) to boost customer experience. It has added a slew of GenAI-powered features to its Trip Intelligence suite to deliver enhanced trip planning and booking experience.

Booking Holdings is well-poised to capitalize on strong growth prospects of the global travel and tourism marklet on the back of its robust travel booking offerings, flight capabilities and expanding partner base.

Per a Statista report, revenues in the global travel and tourism market are expected to hit $927.3 billion in 2024 and reach $1.06 trillion by 2028, witnessing a CAGR of 3.5% between 2024 and 2028. The largest category of this market is “hotels,” in which the number of users is expected to reach 1.4 billion by 2028 at a user penetration rate of 28.1%.

Booking Holdings Inc. Price and Consensus

 

Booking Holdings Inc. Price and Consensus
Booking Holdings Inc. Price and Consensus

Booking Holdings Inc. price-consensus-chart | Booking Holdings Inc. Quote

Strong Partner Base Drives Customer Momentum

Strategic partnerships have been playing important roles in shaping the company’s growth trajectory.

Booking.com recently joined forces with the Stonewall National Monument Visitor Center in order to boost the inclusion of LGBTQ+ travel experiences. The move highlights BKNG’s commitment to diversity and inclusionwhich is expected to aid its traction among LGBTQ+ travelers.

Agoda’s partnership with DBS to introduce a reward point redemption system for Hong Kong customers is noteworthy.

Agoda collaborated with Meituan to boost the China travel market by sharing hotel inventories, content and critical business domains.

Booking.com teamed up with Peerspace to offer exclusive discounts on hotels and rental cars to event organizers who book venues on Peerspace and their confirmed attendees.

Priceline’s long-term partnership with Amadeus to enhance its air distribution and IT capabilities by accessing content through the Amadeus Travel Platform is a positive.

These strategic partnerships are expected to help this Zacks Rank #3 (Hold) company to sustain its customer momentum in the online travel booking market, which, per an MMR report, is expected to reach $1.18 trillion by 2030, witnessing a CAGR of 9.7% between 2024 and 2030.

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

In 2023, the company’s gross travel bookings were $150.6 billion, which increased 24% from the prior year.

For 2024, the Zacks Consensus Estimate for gross bookings is pegged at $162.01 billion, indicating growth of 7.6% from the 2023 reported level.

Solid growth in bookings will drive the overall financial performance of Booking Holdings.

The Zacks Consensus Estimate for 2024 revenues is pegged at $23.09 billion, indicating year-over-year growth of 8.1%. The same for earnings is pegged at $178.54 per share, which has been unchanged over the past 30 days. The EPS estimate suggests a year-over-year rise of 17.3%.

Competitive Edge Aids Prospects

A strong partner base, coupled with solid customer momentum, will continue to help Booking Holdings enjoy a competitive advantage against its peers, namely Expedia Group EXPE, TripAdvisor TRIP and Airbnb ABNB, which are also leaving no stone unturned to capitalize on the strong travel demand trend.

BKNG has gained 9.8% year to date against EXPE and TRIP’s loss of 18% and 13.1%, respectively. BKNG has also outperformed ABNB’s return of 9.2% in the same time frame.

Booking Holdings and Expedia are the two juggernauts of the online travel booking industry. The duo accounted for about 60% of all travel bookings in Europe and the United States in 2023. Meanwhile, Airbnb captured the third spot in the market.

Conclusion

Booking Holdings’ strong brand recognition, competitive position, compelling services, expanding global footprints and robust alternative accommodation business are expected to benefit its near-term prospects amid the adverse effects of geopolitical tensions.

Its growing investments in people, generative AI technology, marketing and brand awareness are other advantages.

BKNG currently has a Value Score of B, which presents a strong opportunity for investors.

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Expedia Group, Inc. (EXPE) : Free Stock Analysis Report

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