Booking Holdings: mixed results, but strong fundamentals send the share price up
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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

13 05 booking

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.”

Disclosure

Dominion holds Booking Holdings in its Global Trends Ecommerce Fund.


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