Booking Holdings (BKNG) has seen its shares rise by 40% so far this year, significantly outperforming the Zacks Retail-Wholesale sector, which has grown by 26.7%. Throughout the same period, BKNG has also surpassed competitors in the Zacks Internet-Commerce industry, including Alibaba (BABA), BigCommerce (BIGC), and Beyond, Inc. (BYON).
In comparison, shares for BABA have increased by 17.3%, while BIGC and BYON have faced declines of 36.5% and 77.7%, respectively. The industry overall grew by 36%.
This robust performance for BKNG can be attributed to strong revenue growth and new partnerships. For the first three quarters ending September 30, 2024, the company reported a 10.17% increase in revenues year-over-year, reaching $18.26 billion. This growth is propelled by strategic initiatives such as expanding service options, focusing on alternative accommodations, enhancing AI technologies, and increasing presence in Asian markets.
As of September 30, 2024, BKNG has expanded its alternative accommodation listings to 7.9 million properties, a 10% increase compared to the previous year.
Booking Holdings Inc. Price and Consensus
Booking Holdings Inc. price-consensus-chart | Booking Holdings Inc. Quote
New Partnerships to Boost Revenue
Booking Holdings’ Agoda has teamed up with Amadeus, a global leader in travel technology, to help users find better flight deals and enhance their travel experiences.
This strategic partnership will commence in Thailand and will be expanded to other Asian territories.
Agoda plans to utilize the Amadeus Travel Platform and its extensive network of airline partners to offer users tailored services and products.
This alliance aims to increase customer engagement and satisfaction through improved technology and services.
Agoda’s partnership integrates smoothly with BKNG’s ongoing relationship with Amadeus, facilitating quick cooperation.
AI Innovations Point to Future Growth
BKNG is focusing on artificial intelligence (AI) to elevate customer experiences and improve operational processes. The development of their AI Trip Planner includes a Smart Filter with over 200 search criteria, improving ease of use for customers.
This AI integration provides important insights on customer preferences and benefits the business aspect of the platform as well.
Moreover, BKNG is exploring the use of Generative AI in customer service to enhance user experience.
Positive Projections for Future Earnings
For the fourth quarter of 2024, BKNG anticipates room night growth between 6% and 8%, with gross bookings expected to rise between 7% and 9%.
Projected revenue growth for the fourth quarter is between 7% and 9%, while adjusted EBITDA is forecasted to be between $1.6 billion and $1.65 billion.
For the entire year of 2024, growth in gross bookings is expected to reach approximately 8%, with revenue growth projected at 10%. Adjusted EBITDA will likely rise between 13% and 14%. Earnings growth is forecasted in the high teens percentage range.
Analysts’ Earnings Estimates Look Favorable
The Zacks Consensus Estimate for fourth-quarter 2024 earnings stands at $35.92 per share, reflecting a slight decline of 2.4% over the past month but indicating a 12.25% increase year-over-year.
Revenue expectations for the fourth quarter are pegged at $5.19 billion, which would represent an 8.45% year-over-year growth.
For 2024, the revenue estimate is around $23.42 billion, signifying a 9.62% year-over-year increase.
The earnings forecast for the year is $181.49 per share, up about 2.6% recently and showcasing a projected growth of 19.23% from the prior year.
Historically, the company has outperformed earnings estimates in each of the last four quarters, yielding an average surprise rate of 16.75%.
Keep updated on upcoming earnings reports with the Zacks Earnings Calendar.
Should You Buy BKNG Stock?
Currently, BKNG shares are considered slightly overvalued, reflected by a Value Score of C.
However, the company’s potential for growth due to an increasing customer base and successful AI strategies are promising signs for investors.
With a Zacks Rank #2 (Buy), it may be an opportune time for investors to consider adding BKNG to their portfolios.
You can view the complete list of Zacks #1 Rank (Strong Buy) stocks here.
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