Booking Holdings is Wednesday's IBD Stock of the Day. Booking stock has formed a cup-with-handle chart pattern following a strong overall earnings season for travel companies.
On the stock market today, shares of the online travel company gained a fraction to close at 5,034.55. Booking stock has formed a cup-with-handle base with a 5,282 buy point on its weekly chart, according to MarketSurge pattern recognition.
Booking Holdings includes Booking.com, Priceline, Agoda, OpenTable and Kayak. Booking stock has gained roughly 48% over the past 12 months but its rally has slowed to a 3% gain year-to-date.
Strong Results For Booking, Expedia Group, Airbnb
Booking Holdings and its online travel rivals closed 2024 seeing strong demand, despite concern that a post-pandemic revenge travel boom would fade. Fourth-quarter earnings and revenue both topped estimates. Total bookings on its platform grew 17% to $37.2 billion, ahead of estimates for $34.6 billion.
Booking Holdings has accelerated its earnings and revenue growth in back-to-back quarters.
But Booking stock was dinged following the report by a lighter-than-expected forecast. Still, analysts were positive overall on the results, particularly because Airbnb and Expedia Group each posted strong results for the December-ended period.
Evercore ISI analyst Mark Mahaney wrote in a recent note to clients following Booking Holdings' report that global travel demand "remains robust." And, he added, Booking Holdings is outperforming among the so-called online travel agencies, or OTAs, for total nights booked.
"Looking at Q4 results across the major OTAs, it's evident that Booking is outpacing the group with 13% year-over-year room night growth in Q4 vs. 12% for Airbnb and Expedia even though Booking has over twice the room night base of Airbnb and 3x the base of Expedia," Mahaney wrote. "In the U.S. market, Booking grew Room Nights 10% year over year vs. high-single-digit % for Expedia and mid-single-digit % for Airbnb."
Mahaney rates Booking stock as outperform.
Booking Stock: What Is Booking Holdings' Gen AI Plan?
With travel demand holding up, Booking stock investors are focusing on how the company will utilize generative artificial intelligence.
Competition for AI-powered trip planning is growing, with OpenAI's ChatGPT and Google's Gemini offering their own solutions. That could pose a potential threat to Booking Holdings, particularly because its websites rely on Google for web traffic.
But Chief Executive Glenn Fogel used Booking Holdings' earnings call last week to tout its AI offerings. That includes an AI Trip Planner on Booking.com and an AI-powered travel assistant called Penny available through Priceline.
"We believe that compelling AI-powered offerings, like a travel vertical specific agent, will play a central role in delivering even more seamless and personalized 'Connected Trip' experience to travelers," Fogel told analysts. "We see the development and use of AI agents ... as a potential way to more quickly bring together the different elements of travel into a truly connected offering on our platform."
"Investors continue to debate whether it's more opportunity or threat to the OTAs, but (Fogel) made his bull case on Booking's ability to leverage AI – and pointed to BKNG's early adoption of previous emerging/disruptive technologies," D.A. Davidson analyst Tom White wrote to clients following the report.
White rates Booking stock a buy.
Booking Stock Top Rated In Industry Group
Meanwhile, Booking stock has an IBD Composite Rating of 98 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
The score makes Booking Holdings the top rated stock in the Leisure-Travel Booking group tracked by IBD. Expedia is second while India-focused MakeMyTrip is third, followed by Airbnb.
Further, Booking's IBD Relative Strength Rating is a strong 89 out of 99.
