Booking Holdings (BKNG) experienced a notable surge in its stock price following the release of impressive third-quarter results that exceeded analysts’ expectations. The Connecticut-based online travel agency revealed a December-quarter forecast that aligns with Wall Street’s anticipations, alleviating some concerns regarding U.S. travel demand.
In its latest report, Booking Holdings announced adjusted earnings of $99.50 per share for the quarter ending in September, marking a 19% increase from the same period a year prior. This figure surpassed the consensus estimate of $95.85 per share from analysts surveyed by FactSet. Furthermore, the company’s sales grew by 13% year-over-year, reaching $9.01 billion, significantly above the forecast of $8.73 billion.
As the parent company of reputable brands such as Booking.com, Priceline, and OpenTable, Booking Holdings maintains its status as the largest global online travel agency, facing competition from firms like Expedia Group and Airbnb.
The company reported a total bookings value of $49.7 billion across its platforms, reflecting a robust 14% year-over-year increase, also exceeding the projected $48 billion according to FactSet. For the upcoming fourth quarter, Booking Holdings anticipates revenue growth between 10% and 12%. While the midpoint of this estimate is slightly below the 11.8% growth anticipated by analysts, its bookings growth forecast of approximately 12% exceeds the previously expected 11.7%.
RBC Capital analyst Brad Erickson noted that Booking Holdings reported a strong third quarter, with gross bookings exceeding expectations by 3.6%, driven by an impressive 8% growth in room nights—surpassing the Street’s estimate of 6%.
Following the earnings announcement, Booking stock rose by 4.8% to 5,365 in after-hours trading. However, it’s worth noting that the stock had previously dropped 2.5% in regular trading earlier that day. Year-to-date, Booking shares are up 4.5%, but this performance lags behind the approximately 17% gain seen by the S&P 500.
Investors have expressed concerns about potential declines in U.S. travel demand and the competitive long-term risks presented by AI technologies, such as OpenAI and other chatbots, which could capture significant market share in travel booking.
Before the Q3 earnings release, Booking stock held an IBD Composite Rating of 77 out of a maximum of 99, indicating room for growth compared to the top-performing stocks, which typically have a rating of 90 or above.
Overall, Booking Holdings remains resilient in a competitive landscape, adapting its strategies to ensure continued growth and market leadership.