Booking Holdings: mixed results, but strong fundamentals send the share price up
Booking Holdings released a mixed earnings report for the first quarter of 2019, but while metrics were up and down, the company’s underlying business looks strong. That was enough, it seems, for investors to rally around the stock, sending it up steeply at the end of last week. With new marketing campaigns just beginning to resonate, rising numbers of booking on its ecosystem, and on-going tailwinds powering the online travel sector, Booking Holdings remains confident in its future performance.
Booking Holdings’ share price jumped by 2% at the end of last week
Source: Yahoo Finance
Gross travel bookings, which could well be seen as the main gauge of Booking Holdings’ overall health, rose by 2% year on year to $25.4 billion. But if you strip out currency effects, that becomes an 8% increase. Revenue was down by 3% against the same period last year (again, stripping out currency effects translates this into a positive performance of 3%) and net income rose by 26% from the year-ago quarter to $765 million.
Breaking down where growth was coming from – and where it might come from in the future – CEO Glenn Fogel told analysts on the company’s earnings call: “Our direct channel is growing faster than our paid channels, our mobile share is increasing, and our alternative accommodation business is growing faster than our overall business. We will look to drive shareholder returns through a combination of organic growth investment, share repurchases and opportunistic M&A.”
However, he declined to speculate over possible acquisition targets, saying: “As you know, we wouldn't talk about any specific targets or anything of that nature. But we’ve built this company over time by bringing in great teams, great products, and that's what we're going to continue to do.”
Dominion holds Booking Holdings in its Global Trends Ecommerce Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.