We think that Booking Holdings stock (NASDAQ NDAQ: BKNG), the world’s largest online travel agency that provides services like lodging, airline tickets, and car rentals, could see a recovery in the long run after a 25% year-to-date decline, at the current price of about $1788 per share. Since the start of 2022, BKNG stock has dropped from about $2461 to $1788, a decline that is more pronounced than the S&P index’s 20 percent decline. The continued worry about inflation, rising interest rates, record gas prices, and a potential recession are to blame for the stock market’s decline. It should be noted that booking trends have been encouraging so far in 2022, despite the possibility that the company’s stock price will remain under pressure due to general concerns. Compared to the 2019 pre-pandemic quarter, BKNG experienced record gross bookings in Q1. In fact, the company stated during its first-quarter earnings call that despite the uncertainties surrounding the Russian invasion of Ukraine and the global rise in inflation, global leisure travel trends have continued to improve in the second quarter and that it is anticipating a busy summer travel season. All of this points to expectations of an upward recovery in stock price levels.
The company’s gross travel bookings increased by almost 130% year over year in Q1 2022 to $27.3 billion, which was up 7% from Q1 2019. Additionally, compared to Q1 2021, the platform saw a twofold increase in the number of room nights booked. With an adjusted net income of $161 million, the travel company reversed a loss from the prior year, showing an almost complete recovery. Its total revenue increased by 136 percent year over year to $2.7 billion. Asia was the only market that was still operating below 2019 levels in April, and room nights increased by 10% in comparison to 2019 overall. However, bookings in Asia have improved from a -35% decline in Q1 2019 to a decline in the high teens in April. When compared to April of 2019, the company’s gross bookings increased by over 30%. Although it did not provide any guidance, management was optimistic that there would be an operating profit in the second quarter.
For the fiscal year 2022, we expect Booking Holdings Revenues to total $16.3 billion, an increase of 49% year over year. In terms of the bottom line, we currently anticipate $92.11 in earnings per share. Based on a $92.11 expected EPS and a 25.3x P/E multiple for the fiscal year 2022, we have revised our Booking Holdings Valuation to $2328 per share in light of the changes to our revenue and EPS forecast. However, with a 32 percent premium over the current market price, the company’s stock appears to be very undervalued at the current levels. Even though consumers are undoubtedly thinking about traveling, a number of headwinds could start to blow once more and upend this stock. It is likely that the broader markets will experience lower levels in this situation. Furthermore, a further decline in the price of BKNG stock can be used as a buying opportunity for longer-term gains.
You can view our past coverage of Booking Holdings stock here to follow the evolution of our opinion.
Understanding how its competitors compare is useful. See how Booking Holdings’ competitors perform on key performance indicators. At Peer Comparisons, you can find additional insightful comparisons for businesses in various industries.
Booking Holdings has decreased by 25% this year as a result of rising inflation and rising interest rates from the Fed. Can it fall further? By comparing the decline of BKNG stock during prior market crashes, determine how low it can go. Here is a list of every stock’s performance during previous market crashes.
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