On Friday, Booking Holdings Inc. (NASDAQ:BKNG) saw its price target increased by Susquehanna from $4,100.00 to $5,500.00, with the firm maintaining a Positive rating on the stock. The upgrade follows Booking Holdings’ third-quarter results, which surpassed expectations in terms of revenue and earnings.
The company reported robust growth in gross bookings, which saw a 9% year-over-year increase on a constant currency basis, outperforming both Susquehanna's estimate by 6% and the consensus by 4%. Revenue also experienced a similar 9% year-over-year growth, again beating estimates and consensus by 6% and 5% respectively.
The earnings before interest, taxes, depreciation, and amortization (EBITDA), including stock-based compensation (SBC), reached $3.7 billion, surpassing Susquehanna's forecast by 11% and consensus by 9%. This strong performance was attributed to the growth in top-line revenue and a smaller-than-anticipated increase in fixed expenses.
Booking Holdings also posted a non-GAAP (Generally Accepted Accounting Principles) earnings per share (EPS) of $83.89, which was 11% higher than Susquehanna's estimate and 9% above the consensus figure. This beat in earnings reflects the company's effective execution in a recovering travel market, particularly in Europe.
The positive outlook for the fourth quarter is being fueled by the continuation of strong trends observed into October, as travel demand, especially in Europe, started to pick up pace. Susquehanna's analyst noted that Booking Holdings remains an attractive stock in the online travel space, commending its impressive execution amidst the industry's recovery.
In other recent news, Booking Holdings reported a robust financial performance in the third quarter of 2024, indicating strategic growth in the travel industry. The company recorded nearly 300 million room nights booked, an 8% increase from the previous year. Revenue rose to $8 billion, up 9% from the previous year, while adjusted EBITDA grew by 12% to $3.7 billion. Adjusted earnings per share also saw a significant uptick of 16%.
These recent developments show that Booking Holdings has improved its full-year projections, with gross bookings expected to increase by around 8%, and revenue growth anticipated to be just below 10%. The company also aims for adjusted EBITDA growth of 13-14% and adjusted EPS growth in the high teens.
Booking Holdings continues to strengthen its market position through strategic initiatives such as enhancing alternative accommodations, developing AI capabilities, and advancing its "Connected Trip" vision. The company's optimism is underpinned by the robust performance in Europe, ongoing growth in Asia, and the successful integration of AI across its brands.
InvestingPro Insights
Booking Holdings' strong performance, as highlighted in the article, is further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $154.77 billion, reflecting its dominant position in the online travel industry. This aligns with the InvestingPro Tip that Booking Holdings is a "prominent player in the Hotels, Restaurants & Leisure industry."
The company's financial health is evident in its revenue of $23.05 billion for the last twelve months as of Q3 2024, with a robust revenue growth of 11.74% over the same period. This growth is consistent with the article's mention of the 9% year-over-year increase in gross bookings and revenue.
An InvestingPro Tip notes that Booking Holdings has "impressive gross profit margins," which is corroborated by the data showing a gross profit margin of 84.67% for the last twelve months as of Q3 2024. This high margin likely contributes to the company's ability to exceed EBITDA expectations, as mentioned in the article.
It's worth noting that InvestingPro offers 20 additional tips for Booking Holdings, providing investors with a comprehensive analysis of the company's performance and outlook. These insights can be valuable for those looking to make informed investment decisions in the dynamic travel industry.
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