Booking Holdings Inc (BKNG, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $3,663.57, Booking Holdings Inc has witnessed a daily gain of 1.01%, marked against a three-month change of 3.07%. A thorough analysis, underlined by the GF Score, suggests that Booking Holdings Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 9/10
- Growth rank: 9/10
- GF Value rank: 6/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability and growth rank, and a slightly lower financial strength and GF Value rank, GuruFocus assigned Booking Holdings Inc the GF Score of 93 out of 100, which signals the highest outperformance potential.
Understanding Booking Holdings Inc's Business
Booking Holdings Inc, with a market cap of $125.19 billion and sales of $21.37 billion, is the world's largest online travel agency by sales. The company's operating margin stands at 27.31%, showcasing its efficiency in managing expenses relative to its revenue. Booking Holdings Inc offers a wide array of services, including hotel and alternative accommodation bookings, airline tickets, rental car services, restaurant reservations, cruises, experiences, and vacation packages. Its portfolio of brands includes well-known names such as Booking.com, Agoda, OpenTable, and Rentalcars.com. The company has also ventured into travel media with the acquisitions of Kayak and Momondo. The majority of Booking Holdings Inc's revenue and profits are derived from transaction fees for online bookings.
Financial Strength Breakdown
According to the Financial Strength rating, Booking Holdings Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Booking Holdings Inc stands impressively at 6.51, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With an Altman Z-Score of 6.5, Booking Holdings Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.69, Booking Holdings Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Booking Holdings Inc's impressive standing among its peers in generating profit. The company's ability to turn revenues into earnings is a testament to its operational efficiency and strategic prowess. The Piotroski F-Score confirms Booking Holdings Inc's solid financial situation based on Joseph Piotroski's nine-point scale, which measures a company's profitability, funding and operating efficiency. This high score indicates that Booking Holdings Inc is managing its operations effectively and is likely to continue its profitable trajectory.
Growth Rank Breakdown
Ranked highly in Growth, Booking Holdings Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 52.4%, which outperforms better than 94.06% of 774 companies in the Travel & Leisure industry. Moreover, Booking Holdings Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 71.8, and the rate over the past five years is 6.6. This trend accentuates the company's continued capability to drive growth.
Next Steps
Considering Booking Holdings Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic initiatives, strong market presence, and consistent financial performance make it a compelling choice for investors looking for sustainable growth. As the travel industry continues to rebound and evolve, Booking Holdings Inc is well-equipped to capitalize on emerging opportunities and maintain its market leadership.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
