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Category: Stock Market and Booking Holdings
Date: 27 February 2020 Stock Price: $1678.20 We take a look at the 4th quarter earnings release of their 2019 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 fears. The stock of Booking Holdings lost almost 19% of its value over the last 2 weeks.
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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' 4th quarter 2019 earnings report
The data below refers to the most recent quarter unless specified otherwise
- Total Revenues: $3.339 billion (up from $3.213 billion from the same quarter of the previous year)
- Revenue increased by 3.92% over the last 12 months
- Total operating expenses: $2.167 billion (up from $2.070 billion for the same quarter of the previous year)
- Total operating expenses increased by 4.7% over the last 12 months
- Some margin pressure was experienced by Booking Holdings with their revenues growing at a slower rate than their operating expenses
- Net income: $1.171 billion (up from $1.143 billion for the same quarter of the previous year)
- Diluted earnings per share: $27.75 (up from $13.86 for the same quarter of the previous year)
- PE ratio of Booking Holdings: 15.01
- Diluted weighted-average shares outstanding: 42.210 million (down from 43.509 million for the same quarter of the previous year)
- Cash and cash equivalents: $6.312 billion
- Cash and cash equivalents per share: $149.54
- Cash and cash equivalents makes up 8.9% of Booking Holdings market capital
- Cash and cash equivalents makes up 29.5% of Booking Holdings total assets
- Goodwill in Booking Holdings: $2.913 billion
- Goodwill per share: $69.01
- Goodwill makes up 13.6% of Booking Holdings total assets
- Stockholders equity in Booking Holding: $5.933 billion
- Stockholders equity per share in Booking Holdings: $140.55
- Booking Holdings is trading at 11.9 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.
- Cash generated from operations (for full fiscal 2019): $4.865 billion
- Cash generated from operations per share (for full fiscal 2019): $115.25
Booking Holdings' management commentary on 4th quarter 2019 earnings and 2020 guidance
NORWALK, CT - February 26, 2020. . . Booking Holdings Inc. (NASDAQ: BKNG) today reported its 4th quarter and full-year 2019 financial results. Fourth 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 $20.7 billion, an increase of 6% over a year ago (approximately 7% on a constant-currency basis). Room nights booked in the 4th quarter increased 12% over a year ago.
"We were pleased with our fourth quarter and full-year 2019 results. While the outlook for global travel in the nearterm is uncertain due to the coronavirus, we will manage the business appropriately to enhance long-term value for our stakeholders" said Glenn Fogel, Chief Executive Officer of Booking Holdings.
"We were pleased with our fourth quarter and full-year 2019 results. While the outlook for global travel in the nearterm is uncertain due to the coronavirus, we will manage the business appropriately to enhance long-term value for our stakeholders" said Glenn Fogel, Chief Executive Officer of Booking Holdings.
Booking Holdings' guidance for the 1st quarter of 2020 fiscal year
The coronavirus has had a significant and negative impact across our business during the 1st quarter. It is not possible to predict where, and to what degree, outbreaks of the coronavirus will disrupt travel patterns. The guidance for the 1st quarter is based on the trends observed in the quarter so far and considers the continued negative impact of the coronavirus. The guidance ranges for the 1st quarter are wider than typically provided given the high level of uncertainty in forecasting the coronavirus and its associated impact on the Company and the travel industry generally. While it is extremely difficult to forecast results, these guidance ranges represent the Company's current estimates of 1st quarter results based on currently available data.
The coronavirus has had a significant and negative impact across our business during the 1st quarter. It is not possible to predict where, and to what degree, outbreaks of the coronavirus will disrupt travel patterns. The guidance for the 1st quarter is based on the trends observed in the quarter so far and considers the continued negative impact of the coronavirus. The guidance ranges for the 1st quarter are wider than typically provided given the high level of uncertainty in forecasting the coronavirus and its associated impact on the Company and the travel industry generally. While it is extremely difficult to forecast results, these guidance ranges represent the Company's current estimates of 1st quarter results based on currently available data.
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 $1237 a stock and its currently trading at $1678.20. That's a very healthy return of 35.7% provided to Booking Holdings stockholders over the last 5 years.
Booking Holdings stock is trading at very close to its 52 week low of $1640.54 and far away from its 52 week low of $2094 which to us is a clear indication that the short term sentiment and momentum of Booking Holdings stock is very negative, largely off course due to fears surrounding 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 $1640.54 and far away from its 52 week low of $2094 which to us is a clear indication that the short term sentiment and momentum of Booking Holdings stock is very negative, largely off course due to fears surrounding Coronavirus which is putting a halt on a lot of people's travel plans which is the core business of Booking.com
Recent coverage of Booking Holdings
The extract below shows recent coverage of Booking Holdings as obtained from TheStreet.com
Booking Holdings (BKNG), parent of airline-booking websites like priceline.com and kayak.com and the restaurant-reservation service opentable.com, reported fourth-quarter earnings per share doubled as revenue advanced 3.9%. Both figures were stronger than Wall Street analysts had estimated.
At the same time, the company warned investors and analysts that the "coronavirus has had a significant and negative impact across our business during the first quarter." And it said it can’t predict “where, and to what degree, outbreaks of the coronavirus will disrupt travel patterns.” In the fourth quarter the Norwalk, Conn., company earned $27.75 a share compared with $13.86 in the year-earlier quarter. The latest adjusted earnings were $23.30 a share.
Revenue reached fell to $3.34 billion from $3.21 billion.
A survey of analysts by FactSet produced consensus estimates of profit of $21 a share, or an adjusted $22.04, on revenue of $3.28 billion. Regarding the outlook, Booking Holdings said its first-quarter guidance is based on "trends observed in the quarter so far and considers the continued negative impact of the coronavirus.
Read the full article here
Booking Holdings (BKNG), parent of airline-booking websites like priceline.com and kayak.com and the restaurant-reservation service opentable.com, reported fourth-quarter earnings per share doubled as revenue advanced 3.9%. Both figures were stronger than Wall Street analysts had estimated.
At the same time, the company warned investors and analysts that the "coronavirus has had a significant and negative impact across our business during the first quarter." And it said it can’t predict “where, and to what degree, outbreaks of the coronavirus will disrupt travel patterns.” In the fourth quarter the Norwalk, Conn., company earned $27.75 a share compared with $13.86 in the year-earlier quarter. The latest adjusted earnings were $23.30 a share.
Revenue reached fell to $3.34 billion from $3.21 billion.
A survey of analysts by FactSet produced consensus estimates of profit of $21 a share, or an adjusted $22.04, on revenue of $3.28 billion. Regarding the outlook, Booking Holdings said its first-quarter guidance is based on "trends observed in the quarter so far and considers the continued negative impact of the coronavirus.
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 $1620.30 per stock (down significantly on our 3rd quarter 2019 earnings report valuation of Booking Holdings, mainly due to the impact of Coronavirus on the group's 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 $1620.30. A good entry price into Booking Holdings would therefore be at $1458.30 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 $1620.30. A good entry price into Booking Holdings would therefore be at $1458.30 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 1st quarter 2020 earnings release in late May 2020