This online travel service company beat Wall Street’s earnings estimates by $1.30 per share last quarter. Analysts expect the company to grow by 15.58% annually over the next five years.
Booking Holdings Inc. (BKNG)
From Hendershot Investments
Booking Holdings (BKNG—formerly Priceline) reported first quarter revenues rose 21% to $2.9 billion while booking a 33% increase in net income to $607 million. EPS soared 35% higher to $12.34.
These strong results reflected the second consecutive quarter of operating margin expansion, thanks to the company’s performance marketing optimization efforts. The company has 5.2 million listings and expects that to grow, as it adds more single-house rentals to its listing base and continues its geographic expansion.
Gross travel bookings increased 21% during the quarter, or 12% on a constant currency basis, to $25 billion. Room nights booked increased 13.2% to 196.8 million; rental car days booked rising slightly to 18.7 million; and airline tickets booked increasing 1.9% to 1.8 million. Free cash flow jumped 64% during the quarter to $508 million.
During the quarter, the company repurchased $719 million of its stock and ended the quarter with more than $16 billion of cash and investments and $8 billion of long-term debt on its balance sheet. The company has $10 billion remaining authorized for future share repurchases, which it expects to complete in the next two to three years.
Management’s outlook for the second quarter is for total gross travel bookings growth of 10%-14% with room nights booked growing 7%-11%. This should lead to revenue growth in the second quarter of 11.5%-15.5%, with EPS expected in the range of $15.50-$16.15, reflecting 10% growth at the midpoint.
Booking Holding’s stock is up 11% year-to-date and still appears reasonably valued.
Ingrid R. Hendershot, Hendershot Investments, www.hendershotinvestments.com, 703-361-6130, June 21, 2018