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Category: Stock Market and Booking Holdings
Date: 8 May 2020 Stock Price: $1443.91 We take a look at the 1st quarter earnings release of their 2020 fiscal year of Booking Holdings, a provider of online travel and related services and owner of brands such as Booking.com and KAYAK. The stock of Booking Holdings has been severely affected by Coronavirus. World wide national lockdowns and travel bans has hit the group's business very hard.
The COVID-19 pandemic has profoundly impacted our Company and the entire travel industry |
About Booking Holdings
Booking Holdings (BKNG) is the world leader in online travel and related services, provided to customers and partners in over 230 countries and territories through six primary brands - Booking.com, KAYAK, priceline, agoda.com, Rentalcars.com and OpenTable. The mission of Booking Holdings is to help people experience the world.
Overview of Booking Holdings' 1st quarter 2020 earnings report
The data below refers to the most recent quarter unless specified otherwise
- Total Revenues: $2.288 billion (down from $2.837 billion from the same quarter of the previous year)
- Revenue decreased by -19.4% over the last 12 months
- Total operating expenses: $2.597 billion (up from $2.281 billion for the same quarter of the previous year)
- Total operating expenses increased by 13.8% over the last 12 months
- Some margin pressure was experienced by Booking Holdings with their revenues declining strongy while operating expenses increased steadily
- Net loss: $699 million (down from $765 million for the same quarter of the previous year)
- Diluted loss per share: -$17.01 (down from $13.86 for the same quarter of the previous year)
- PE ratio of Booking Holdings: Due to the firm currently making a loss no PE can be calculated
- Diluted weighted-average shares outstanding: 41.093 million (down from 145.436 million for the same quarter of the previous year)
- Cash and cash equivalents: $6.363 billion
- Cash and cash equivalents per share: $154.84
- Cash and cash equivalents makes up 10.7% of Booking Holdings market capital
- Cash and cash equivalents makes up 35.6% of Booking Holdings total assets
- Goodwill in Booking Holdings: $2.391 billion
- Goodwill per share: $58.15
- Goodwill makes up 13.4% of Booking Holdings total assets
- Stockholders equity in Booking Holding: $3.831 billion
- Stockholders equity per share in Booking Holdings: $93.22
- Booking Holdings is trading at 15.5 times its stockholders equity per share which is well outside the expected range of between 2 and 4 times that most firms tend to trade at.
- For perspective the average price to book value of firms in the S&P 500 is 3.34. Read more about the S&P500 here.
Booking Holdings' management commentary on their 1st quarter 2020 earnings report
NORWALK, CT – May 7, 2020. . . Booking Holdings Inc. (NASDAQ: BKNG) today reported its 1st quarter 2020 financial results. First quarter gross travel bookings for Booking Holdings Inc. (the "Company," "Booking Holdings," "we," "our" or "us"), which refers to the total dollar value, generally inclusive of taxes and fees, of all travel services booked by its customers, net of cancellations, were $12.4 billion, a decrease of 51% over a year ago (approximately 50% on a constant-currency basis). Room nights booked in the 1st quarter decreased 43% over a year ago. The Company's results for the 1st quarter of 2020 have been significantly and negatively impacted due to the COVID-19 pandemic and the resulting economic conditions and government orders.
"The COVID-19 pandemic has profoundly impacted our Company and the entire travel industry. We have taken immediate steps to stabilize the Company by reducing costs and bolstering our liquidity position" said Glenn Fogel, Chief Executive Officer of Booking Holdings. Mr. Fogel continued, "Looking forward, due to the value of our platform, our highly variable cost structure and strong liquidity, I am confident that we will emerge from this crisis in a position of strength that will allow us to extend our leadership role in the industry."
"The COVID-19 pandemic has profoundly impacted our Company and the entire travel industry. We have taken immediate steps to stabilize the Company by reducing costs and bolstering our liquidity position" said Glenn Fogel, Chief Executive Officer of Booking Holdings. Mr. Fogel continued, "Looking forward, due to the value of our platform, our highly variable cost structure and strong liquidity, I am confident that we will emerge from this crisis in a position of strength that will allow us to extend our leadership role in the industry."
Booking Holdings' total revenues for the 1st quarter of 2020 were $2.3 billion, a 19% decrease from the prior year (approximately 17% on a constant-currency basis). The Company reported a net loss in the 1st quarter of $699 million, compared with net income in the 1st quarter of 2019 of $765 million, which includes an unrealized loss of $307 million and an unrealized gain of $451 million, respectively, on marketable equity securities. Additionally, the net loss in the 1st quarter of 2020 includes impairments of $489 million for OpenTable and KAYAK goodwill and $100 million for an investment in equity securities. The net loss in the 1st quarter of 2020 was $17.01 per diluted share, compared with net income of $16.85 per diluted share in the prior year.
Booking Holdings (NASDAQ: BKNG) stock price history
The image below, obtained from Google, shows the stock price history of Booking Holdings (NASDAQ: BKNG) over the last 5 years. And its been a pretty good time for Booking Holdings stockholders. 5 years ago the stock of Booking Holdings was trading at around $1204 a stock and its currently trading at $1443.91. That's a healthy return of 19.1% provided to Booking Holdings stockholders over the last 5 years.
Booking Holdings stock is trading at very close to its 52 week low of $1107.28 and far away from its 52 week high of $2094 which to us is a clear indication that the short term sentiment and momentum of Booking Holdings stock is very negative at this point in time, largely off course due to the impact on its business caused by the Coronavirus which is putting a halt on a lot of people's travel plans which is the core business of Booking.com
Booking Holdings stock is trading at very close to its 52 week low of $1107.28 and far away from its 52 week high of $2094 which to us is a clear indication that the short term sentiment and momentum of Booking Holdings stock is very negative at this point in time, largely off course due to the impact on its business caused by the Coronavirus which is putting a halt on a lot of people's travel plans which is the core business of Booking.com
Recent Google search trends for Booking stock price and BKNG stock price
The graphic below shows recent Google search trends for booking stock price and BKNG stock price over the last 12 months in the United States. As it shows searches for Booking stock price and BKNG stock price has been very erratic and not a lot of consistent sustained interest in the stock price of Booking.com
Recent coverage of Booking Holdings
The extract below shows recent coverage of Booking Holdings as obtained from Finance.yahoo.com
Booking Holdings (BKNG) came out with quarterly earnings of $3.77 per share, missing the Zacks Consensus Estimate of $5.09 per share. This compares to earnings of $11.17 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -25.93%. A quarter ago, it was expected that this online booking service would post earnings of $22.11 per share when it actually produced earnings of $23.30, delivering a surprise of 5.38%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times. Booking Holdings, which belongs to the Zacks Internet - Commerce industry, posted revenues of $2.29 billion for the quarter ended March 2020, surpassing the Zacks Consensus Estimate by 3.96%. This compares to year-ago revenues of $2.84 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Booking Holdings shares have lost about 32.9% since the beginning of the year versus the S&P 500's decline of -11.8%.
What's Next for Booking Holdings?
While Booking Holdings has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Read the full article here
Booking Holdings (BKNG) came out with quarterly earnings of $3.77 per share, missing the Zacks Consensus Estimate of $5.09 per share. This compares to earnings of $11.17 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -25.93%. A quarter ago, it was expected that this online booking service would post earnings of $22.11 per share when it actually produced earnings of $23.30, delivering a surprise of 5.38%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times. Booking Holdings, which belongs to the Zacks Internet - Commerce industry, posted revenues of $2.29 billion for the quarter ended March 2020, surpassing the Zacks Consensus Estimate by 3.96%. This compares to year-ago revenues of $2.84 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Booking Holdings shares have lost about 32.9% since the beginning of the year versus the S&P 500's decline of -11.8%.
What's Next for Booking Holdings?
While Booking Holdings has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Read the full article here
Booking Holdings (NASDAQ: BKNG) latest stock valuation
So based on Booking Holdings latest earnings report what do we value Booking Holdings stock at? Based on their earnings reported our valuation model provides a target price (full value price) for Booking Holdings at $1390.50 per stock (down significantly on our 4th quarter 2019 earnings report valuation of Booking Holdings, mainly due to the impact of Coronavirus on the group's current and foreseeable future quarters earnings)
We therefore believe that the stock of Booking Holdings stock is slightly overvalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $1390.50 A good entry price into Booking Holdings would therefore be at $1251.50 or below.
We expect the stock of Booking Holdings to pull back from current levels to levels closer to our target price (full value price) in coming weeks and months as we do believe the group's stock is overvalued at its current price and the full impact of Coronavirus has yet to be felt by the group.
We therefore believe that the stock of Booking Holdings stock is slightly overvalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $1390.50 A good entry price into Booking Holdings would therefore be at $1251.50 or below.
We expect the stock of Booking Holdings to pull back from current levels to levels closer to our target price (full value price) in coming weeks and months as we do believe the group's stock is overvalued at its current price and the full impact of Coronavirus has yet to be felt by the group.
Next earnings release of Booking Holdings
It is expected that Booking Holdings will release their 2nd quarter 2020 earnings release in early August 2020