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On Friday, Evercore ISI analyst Mark Mahaney increased the price target on Booking Holdings (NASDAQ:BKNG) to $5,500 from $5,300, while maintaining an Outperform rating on the shares. Currently trading at $5,018, the stock has seen a remarkable 35% return over the past year. The adjustment follows Booking Holdings’ fourth-quarter earnings, which outperformed expectations with strong results across all geographic markets and travel verticals, particularly in accommodations and flights. According to InvestingPro analysis, the company’s current valuation metrics suggest it’s trading above its Fair Value, with a P/E ratio of 33.8x.
Mahaney noted that the company’s fundamentals have strengthened, with accelerated growth in bookings, revenue, and room nights, as well as expanding EBITDA margins. With an impressive gross profit margin of 85.87% and revenue growth of 11.11%, Booking Holdings achieved faster growth in these areas during the fourth quarter than its competitors Airbnb (ABNB) and Expedia (NASDAQ:EXPE), despite being significantly larger in terms of room nights. InvestingPro data reveals the company maintains a "GREAT" financial health score of 3.48, supported by strong profitability metrics and robust cash flows.
The company’s performance in the fourth quarter was characterized by solidly surpassing both Evercore ISI’s and the Street’s expectations. This was attributed to robustness in various sectors of the travel industry and was especially pronounced in the accommodations and flights segments.
While the outlook for the first quarter and full year 2025 was in line with or slightly below Street expectations, this was mainly due to the impact of foreign exchange rates, the leap day comparison, and the shift in Easter timing. Mahaney emphasized that, when adjusting for these factors, the guidance implies a low double-digit percentage growth in bookings, revenue, and EBITDA for the first quarter, indicating no material change in the growth outlook for Booking Holdings.
In other recent news, Booking Holdings reported a strong financial performance for the fourth quarter of 2024, with earnings per share (EPS) of $41.55, surpassing the forecast of $36.13. Revenue for the quarter reached $5.47 billion, exceeding expectations of $5.19 billion. Analysts from Goldman Sachs, JPMorgan, and Citi have all adjusted their price targets for Booking Holdings, reflecting the company’s robust earnings. Goldman Sachs raised its target to $5,020 while maintaining a Neutral rating, citing the company’s operational efficiency and strategic focus on artificial intelligence. JPMorgan increased its target to $5,750, maintaining an Overweight rating, highlighting the company’s strategic initiatives and partnerships in AI. Citi also raised its target to $5,800, reaffirming a Buy rating, and noted the company’s impressive growth in alternative accommodations and room nights.
Booking Holdings has outlined ambitious goals for 2025, including high single-digit growth in gross bookings and revenue, alongside a 15% increase in adjusted EPS. The company has also announced a $20 billion share buyback program, which Citi analysts believe will provide additional support to the stock. Booking Holdings’ management emphasized the role of artificial intelligence as a strategic opportunity to enhance customer service and operational efficiency. The company is also focused on expanding its distribution channels and increasing its direct bookings, which now represent over 60% of total room nights booked. These developments reflect Booking Holdings’ commitment to sustaining growth and delivering value to shareholders.
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