Booking Holdings Inc. (BKNG) has made quite a splash in the online travel industry over the past two decades. Owning multiple travel-oriented companies, such as Booking.com, OpenTable, Priceline, and Agoda, to name a few, BKNG has established a global platform allowing travelers to book everything from flights and hotels to rental cars, all bridgeable in one convenient, easy-to-use hub.
The unprecedented world events of COVID-19 posed great difficulties to the travel industry, yet BKNG witnessed decent top-line growth, with its revenue growing at 4.3% and 6.2% CAGRs over the last three and five years, respectively. The company’s EBITDA witnessed a marginal decline of 2.7% over the last three years.
The resurgence in travel demand helped the stock gain 43.5% over the past six months. Let's look at some of the company's key metrics to put things in perspective.
Monitoring BKNG's Net Income Growth and Asset Turnover Trends
The net income of BKNG has fluctuated significantly over the last two years. In June 2020, it was $2.54 billion, but this decreased to $1.40 billion in September 2020. In December 2020 and March 2021, the net income dropped further to $59 million and $703 million, respectively.
However, by June 2021, it had increased to $414 million and saw another small increase to reach $382 million in September 2021. After September 2021, BKNG saw a large increase in its net income - from $382 million in September 2021 to $1.17 billion in December 2021. As of March 2022, its net income was $520 million, and it saw another large increase as of June 2022, when it reached $1.54 billion.
The last reported value was in December 2022, with a net income of $3.06 billion. This represents an overall growth of 21% from the first value in June 2020.
The overall trend of the BKNG revenue series is increasing, rising from $11.30 billion in June 2020 to $17.09 billion in December 2022. Most recently, BKNG reported a 7.26% growth in revenue from September 2021 ($9.21 billion) to December 2021 ($10.96 billion), which has seen an overall 57.95% growth rate since June 2020.
BKNG's return on assets (ROA) has been generally upward since June 30, 2020, when it was 0.125. The ROA decreased to its lowest point of 0.003 on December 31, 2020, and rebounded in 2021. The ROA reached its peak of 0.13 on December 31, 2022, showing a growth rate of 9.4%.
BKNG's asset turnover has shown a generally increasing trend from June 2020 to December 2022, with temporary fluctuations. Most recently, Asset Turnover was 0.725 in December 2022, indicating growth of about 30% over the past two years.
BKNG Share Price Rises 42% in 6 Months
There is an overall upward trend in BKNG share prices, beginning with a value of $1,864.44 on November 4, 2022, and peaking at $2,678.04 on April 21, 2023. The growth rate is increasing over time, as the share price has increased by more than 42% within the given time frame. Here is a chart of BKNG's price over the past 180 days.
BKNG POWR Ratings: Quality, Momentum, and Sentiment
The POWR Grade of BKNG is currently B, indicating a Buy in our proprietary POWR Ratings system. The stock ranks 14 out of 59 stocks in the Internet industry. This grade and rank reflect the stock's performance until May 01, 2023.
The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree. The three most noteworthy POWR Ratings dimensions for BKNG are Quality, Momentum, and Sentiment.
Quality has the highest ratings, reaching 100 in April 2023. Sentiment follows closely behind at 91 in March 2023, and Momentum is third with 74 in April 2023. From November 2022 to April 2023, there is an increasing trend with Quality, Momentum, and Sentiment, with all three ratings reaching their highest points in April 2023.
How Does (BKNG) Stack up Against Its Peers?
Other stocks in the Internet sector that may be worth considering are Travelzoo (TZOO), Opera Limited (OPRA), and trivago N.V. (TRVG) -- they have better POWR Ratings.
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BKNG shares were trading at $2,704.74 per share on Monday afternoon, up $18.43 (+0.69%). Year-to-date, BKNG has gained 34.21%, versus a 9.38% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
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