Here’s Why We Believe Booking Holdings Is Worth $2,064 Per Share

Booking Holdings (NASDAQ: BKNG) has had a mixed year so far. The stock touched an all-time high of almost $2,229 per share in the first quarter, but has been on the downfall since the announcement of its 2Q’18 results. This is largely because the company postponed the release of its June quarter results by a day, creating anxiety among investors. Further, the company saw slower-than-expected room night growth during the second quarter due to over estimation of the impact from the FIFA World Cup and unusual weather in core European markets. While the company’s focus on increasing its direct business and reducing the dependence on performance marketing channels will be a drag on its performance in the short term, we believe that its strategy to provide a more holistic travel experience to its customers will drive loyalty and build a larger direct brand, which will augment its long term value.

We currently have a price estimate of $2,064 per share for Booking Holdings, which is almost 6% higher than the market price. View our interactive dashboard – Booking Holdings’ Price Estimate and and modify the different drivers to visualize the impact on the company valuation.

Creating A Stronger Brand

Booking Holdings has been working actively to reduce its historical dependence on performance marketing channels and increase its direct business. For this, the company has been ramping up its capital investment on brand marketing and judiciously choosing new brand campaigns and channels. While the transition to direct marketing from performance marketing is likely to slowdown its growth in the near term, a strong brand marketing effort will boost the company’s top-line growth and prove to be beneficial in the long term.

In addition to this, Booking Holdings aims to build a leading alternative accommodations platform by providing the largest accommodation choice with best value and experience to its customers. As of June 30, Booking.com had a total of roughly 28.8 million reported listings, of which 23.3 million were reported listings in hotels, motels, and resorts and 5.5 million were reported listings in homes, apartments, and other unique places to stay. The company plans to consistently grow its reported listings, expand its properties on its online accommodation booking website, and improve its technological capabilities, which is expected to boost its growth in the near term.

Catering Growth Markets Through Acquisitions

Booking Holdings also aims to widen its offerings at competitive prices, and offer an easy-to-use user interface, and strong customer service. It expects to provide a more holistic travel experience to its customers, which is likely to drive its value in the coming quarters. In this quest, the company is investing in key growth markets in the Asia-Pacific region. For instance, the company has been growing organically as well as through strategic partnerships in China, which is one of its core focus markets. Recently, the company made a strategic investment in the Chinese ride-sharing company, DiDi. The company is optimistic about the partnership and the upside potential that the investment could have for both the companies.

Furthermore, Booking Holdings has also announced the acquisition of HotelsCombined, a leading hotel metasearch brand with a strong presence in several APAC markets. HotelsCombined will report into KAYAK and will support the company in becoming the global market meta leader through increased scale, greater geographic breadth in the world’s fastest-growing region, and expanded hotel and affiliate services. Given that the company will continue to forge partnerships in growth markets, we expect it to witness a strong growth in its top-line as well as valuation in the long term.

Do not agree with our forecast? Create your own price forecast for Booking Holdings by changing the base inputs (blue dots) on our interactive dashboard.