In this article, we will discuss: 10 Best Leisure and Recreation Services Stocks to Buy Now.
Leisure travel is booming and setting new records. According to AAA, 119 million Americans will travel 50 miles or more between December 21 and January 1, breaking the 2019 record by 64,000. Holiday travel has reached all-time highs. Over 3 million passengers were screened by TSA on December 1st, and 18.3 million passengers were screened during Thanksgiving week, both of which set new records. Despite a 4% yearly rise in ticket prices, demand has been fueled by a 9% drop in airfare this season. Spending has been driven by continued stimulus savings, low unemployment, and wage hikes. Despite continuing consumer concerns about economic instability, Lee McPheters, a research professor and director of the JPMorgan Chase Economic Outlook Center in Arizona State University’s W. P. Carey School of Business, points out that the industry’s resurgence is being driven by pent-up demand and strategic pricing, with travel being prioritized for experiences.
The leisure market has grown remarkably in the last few years. The global leisure market was valued at $1.46 trillion in 2023, and Market Research Intellect projects that it will rise at a compound annual growth rate of 21.8% between 2024 and 2031, reaching $8.6 trillion.
According to Deloitte’s report, in Q3 2024, the leisure industry continued to rebound, as total net expenditure increased from -10.3% in Q2 to -8.5%, the highest level since Q1 2022. Short holidays (+4.7 percentage points) and eating out (+5.5 percentage points) topped the increase in spending across nine of the eleven leisure categories. Casual dining sites rose by 1.7% year on year, with three new locations opening each week.
While spending on long vacations dropped because of rising expenses and economic uncertainties, short vacations gained popularity as consumers prioritized affordability. Live sports, concerts, and festivals drove a 4.1 percentage point increase in net spending on culture and entertainment. Spending at pubs and bars and leisure activities at home both climbed by 1.7 and 1 percentage point, respectively.
Nonetheless, it is anticipated, as per the Deloitte Consumer Tracker, that spending will decrease in nine out of eleven categories in Q4 2024, with the biggest declines occurring in eating out (-5.9 points) and longer holidays (-8.1 points). The hospitality industry will face challenges from growing expenses and cautious consumers, necessitating flexibility and value-driven tactics.
According to Lodging Analytics Research & Consulting (LARC), leisure demand growth will resume in 2025, providing a possible recovery for the industry as it adjusts to changing market conditions. As per the report, a 2.7% increase in ADR and flat occupancy would propel a 2.7% RevPAR growth in 2025. This comes after a 1.4% RevPAR growth in 2024, which was bolstered by a 1.6% increase in ADR and a 0.3% decline in occupancy. Key reasons cited by LARC include “growing inbound foreign arrivals” and the moderating strength of the US dollar. Corporate transitory demand is projected to remain strong in the first half of 2025, while convention activity, which increased by 4% in 2024, is expected to grow by 5% in 2025. Moody’s predicts a 2.2% GDP growth rate in 2025 along with further rate cuts from the Fed, providing a “short-term tailwind.”
Meanwhile, according to KPMG’s Global Leisure Perspectives 2024 report, the future of the hotel industry is being shaped by seven key trends. Automation and artificial intelligence (AI) are simplifying processes and improving visitor experiences with dynamic pricing and tailored advertising. A growing amount of personalization is data-driven, adjusting visitor experiences according to behavioral findings. Alternative lodging choices, such as rentals and glamping, are becoming increasingly popular, encouraging hotels to provide unique, authentic experiences. New revenue streams are being investigated, such as creating flexible work arrangements in underutilized locations. Unbundling services enable visitors to customize their stay, and creative collaborations are increasing market share and reach. Embracing these developments will be critical for remaining competitive in the changing landscape.
Commenting on technological developments in the leisure sector, Paul Fultz, Partner and US Segment Leader, Restaurants at KPMG in the US, remarked:
“As labor, supplychain and recession pressures abate, it is encouraging to see restaurant operators actively transform their operational capabilities and experiential strategies with digital technologies like automation and AI. It’s that kind of innovative thinking that will impact customer loyalty, near-term value and long-term growth”.
With that said, here are the 10 Best Leisure and Recreation Services Stocks to Buy Now.
A family happily enjoying a theme park ride, showing the joy of experiential leisure travel.
Our Methodology
We sifted through holdings of leisure ETFs and online rankings to form an initial list of 20 leisure stocks. From the resultant dataset, we chose 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 900 hedge funds in Q3 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s Revenue Growth Rate (year-over-year) as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10. Warner Bros. Discovery Inc. (NASDAQ:WBD)
Number of Hedge Fund Holders: 49
One of the Best Leisure Stocks, Warner Bros. Discovery, Inc. (NASDAQ:WBD), was founded in 2022 from the merger of WarnerMedia and Discovery Communications. It functions in three international business segments: direct-to-consumer, networks, and studios. The studio’s jewel is Warner Bros. Pictures, which produces, distributes, and licenses motion pictures and television series. Basic cable networks like CNN, TNT, TBS, Discovery, HGTV, and the Food Network make up the networks industry. HBO and the company’s streaming services, which have since been combined into Max and Discovery+, are examples of direct-to-consumer. The company’s other two business groups produce a large portion of the DTC content. Each component has a global presence, with Max available in over 60 countries.
Warner Bros. Discovery, Inc. (NASDAQ:WBD)’s strategic restructuring and collaborations position the company for a higher valuation by separating its cash-generating heritage TV business from its growth-oriented Streaming & Studios division, which is expected to generate $23 billion by 2025. While Max’s international development and password-sharing policies increase competitiveness with Netflix, the enlarged Comcast partnership guarantees steady cash streams and settles significant legal disputes. Together with its skilled management, these actions position WBD as a powerful rival in the digital media market, with strong upside potential for long-term investors.
In Q3 of 2024, Warner Bros. Discovery, Inc. (NASDAQ:WBD) reported a 30% YoY growth in TV revenue, driven by higher initial telecast revenue and rising demand for television content as a result of the previous year’s WGA and SAG-AFTRA strikes. Strong box office successes from movies like Barbie helped the studios’ revenue rise 6% year over year to $3.8 billion. Furthermore, Direct-to-Consumer (DTC) revenue increased by 12% YoY, driven by increased subscriber growth on platforms such as Max and higher average revenue per user (ARPU).
Chuck Royce’s Royce & Associates was the largest stakeholder in the company from among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 95.45 million shares worth $787.47 million as of Q3.
9. Expedia Group Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 52
Revenue Growth Rate (year-over-year): 10.05%
Expedia Group, Inc. (NASDAQ:EXPE) is among the Best Leisure Stocks and the world’s second-largest online travel agency by bookings. It offers lodging (80% of total sales in 2023), airline tickets (3%), rental cars, cruises, in-destination, and other (11%), and advertising revenue (6%). Although Expedia operates numerous branded travel booking websites, its three primary brands are Vrbo, Hotels.com, and Expedia. Additionally, it owns the Trivago metasearch brand. Online booking transaction fees account for the majority of sales and earnings.
Expedia (NASDAQ:EXPE) stock is up more than 27% year to date due to strong travel demand and development in its B2B and B2C segments. The third quarter of 2024 saw a 3% YoY increase in revenue to $4.06 billion, a 7% YoY increase in gross bookings to $27.5 billion, a solid B2B performance, and a mid-teens increase in room nights for Brand Expedia. Net income increased by 61%, while EPS increased by 76% year over year to $5.04.
Expedia has also increased shareholder value through share repurchases and the “One Key” loyalty program, which promotes consumer loyalty and repeat bookings.
In light of generally positive travel trends and Thanksgiving-related positive tourism data, Bank of America has increased its recommendation on Expedia stock from Neutral to Buy, raising its price objective on the shares from $187 to $221.
Snehal Amin’s Windacre Partnership was the largest stakeholder in the company from among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 4.32 million shares worth $639.99 million as of Q3.
Carillon Chartwell Mid Cap Value Fund stated the following regarding Expedia Group, Inc. (NASDAQ:EXPE) in its Q3 2024 investor letter:
“Expedia Group, Inc. (NASDAQ:EXPE) is an online travel services provider with several leading brands including Expedia, Hotels.com, and Vrbo. The company saw accelerating bookings growth at Expedia and a return to growth at vacation rental platform Vrbo.”
8. Royal Caribbean Cruises Ltd. (NYSE:RCL)
Number of Hedge Fund Holders: 52
Revenue Growth Rate (year-over-year): 57.24%
One of the Best Leisure Stocks, Royal Caribbean Cruises Ltd. (NYSE:RCL), the world’s second-largest cruise operator, runs 68 ships under five international brands and partner firms. The business is in charge of Royal Caribbean International, Silversea, and Celebrity Cruises. The company also holds a 50% share in a joint venture that manages TUI Cruises and Hapag-Lloyd Cruises. Royal’s collection of brands allows it to compete on the basis of innovation, ship and service quality, variety of itineraries, destination selection, and cost. The company completed the sale of its Azamara brand in 2021.
Royal Caribbean Cruises Ltd. (NYSE:RCL)’s high demand and pricing patterns have been sustained into 2024 by consumer enthusiasm for travel. After the fleet was redeployed, which was completed in the middle of 2022, occupancy returned to historical levels, helping to normalize cash flow and earnings. The firm anticipates significant growth in 2024 as a result of excellent booking patterns and price levels brought about by a robust customer appetite for travel, despite record pricing in 2023 (13% higher than in 2019).
In Q3 of 2024, Royal Caribbean Cruises Ltd. (NYSE:RCL)’s revenue grew by 17.45% YoY to $4.9 billion, primarily due to strong close-in demand, higher onboard spending, and improved pricing for European and Alaskan itineraries. Onboard and pre-cruise revenue greatly exceeded 2023 levels, showing strong consumer spending and participation, while net yields increased by 7.9% year over year. The company’s 2024 EPS forecast has been raised to $11.57–$11.62 (up 71% YoY), and it projects that 2025 EPS would surpass $14 due to yield growth, pricing power, and new private destinations like Perfect Day Mexico (2027).
Argus maintained its Buy rating on Royal Caribbean Cruises Ltd. (NYSE:RCL) shares and increased its price objective from $250 to $280. In a research note, the analyst informs investors that the company has resumed paying dividends, with a $0.40 quarterly dividend per share being paid on October 11, 2024. Additionally, according to Argus, the high cruise occupancy rate of 111% in Q3 of 2024 indicates sustained high demand and is probably going to provide higher-than-expected revenue and earnings.
E. Shaw’s D E Shaw was the largest stakeholder in the company from among the funds in Insider Monkey’s database at the end of Q3 2024. It owns 2.28 million shares worth $404.07 million as of Q3.
7. Formula One Group (NYSE:FWONK)
Number of Hedge Fund Holders: 54
Revenue Growth Rate (year-over-year): 25.22%
Formula One Group’s (NYSE:FWONK) primary business is to generate revenue off of its exclusive commercial and promotional rights to the FIA Formula One World Championship series. The company is responsible for developing and marketing the Formula One race series in collaboration with its three partners: the racing teams, the Formula One Association (FIA), and the series’ sponsors, broadcasters, and race promoters. In January 2017, Liberty Media purchased the Formula One Group company. The Formula One Group and Liberty Media’s properties are tracked by the Formula One stock.
In Q3 of 2024, there was double-digit growth across all revenue streams, making it one of the Best Leisure Stocks. Overall, Formula One Group (NYSE:FWONK)’s revenue grew by 35.32% YoY. The current Formula One season is extremely competitive, with the constructors’ and drivers’ championships coming to an end, according to management’s fiscal third quarter figures for 2024. F1 has done well financially, as seen by its 15% increase in revenue. Two more races this season, new collaborations, and improvements to F1 TV and hospitality services are all responsible for the income growth.
Notably, with the goal of expanding their market presence and global sponsorships, management has inked new business contracts with firms like American Express and LVMH. The number of people attending the Formula One season has increased to 5.8 million in Brazil. Attendance at seven races broke previous records, while the number of social media followers rose by 38% annually.
Benchmark maintained its Buy recommendation on Liberty Formula One Group (NYSE:FWONK) shares and increased the price objective from $81 to $102. The analyst informs investors that the company’s updated 2025 price target takes into account the “enthusiastic global market for sports assets with new financial interest from private equity and sovereigns,” the elimination of a 10% complexity discount, and the simplification of Liberty’s overall structure, including ongoing spin activity for Liberty Live.
Warren Buffett’s Berkshire Hathaway was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 7.72 million shares worth $597.95 million as of Q3.
6. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 54
Revenue Growth Rate (year-over-year): 63.60%
One of the Best Leisure Stocks, DraftKings Inc. (NASDAQ:DKNG) was founded in 2012 and is a pioneer in the daily fantasy sports business. Following a Supreme Court decision in 2018 that permitted states to allow online sports betting, the company then ventured into the online sports and casino gaming markets. It rose to prominence in North America’s sports betting and iGaming markets, and it currently shares 70% of its revenue with FanDuel.
Approximately 40% of Canadians can now use DraftKings Inc. (NASDAQ:DKNG)’s online or retail sports betting in 25 states and its iGaming offerings in seven states. The company also runs a commission-based, non-fungible token marketplace and creates and licenses online games.
The Q3 of 2024 results of DraftKings Inc. (NASDAQ:DKNG) show a 39% YoY increase in revenue to $1,095 million, along with a notable increase in customer acquisition. While cutting its Customer Acquisition Cost (CAC) by over 20%, DraftKings increased its online sportsbook and iGaming clientele year over year. In Q3 of 2024, the adjusted gross margin increased by 300 basis points over the previous year to 40%. The firm reaffirmed its $900 million to $1 billion adjusted EBITDA estimate range for fiscal year 2025, with a 31% annual sales growth forecast.
DraftKings Inc. (NASDAQ:DKNG) entered new NBA markets and expanded its same-game parlay offers, resulting in greater engagement and recognition as the best sportsbook app in the United States.
Deutsche Bank upgraded its price objective for DraftKings Inc. (NASDAQ:DKNG) from $33 to $36. In order to account for the shift from 2025 to 2026 as the base year for its assessment, the firm revised its price objective and updated projections for gaming firms.
Paul Marshall And Ian Wace’s Marshall Wace LLP was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 8.37 million shares worth $328.25 million as of Q3.
5. Marriott International Inc. (NASDAQ:MAR)
Number of Hedge Fund Holders: 60
One of the largest hotel chains in the world and the Best Leisure Stocks, Marriott International Inc. (NASDAQ:MAR) boasts a portfolio of over 8,000 hotels in 140 countries. The company oversees 1.7 million rooms under nearly 30 brands. By the end of 2023, 10% of all rooms were classified as luxury, 42% as premium, 46% as select service, 1% as midscale, and 1% as other. The more recent lifestyle brands are Autograph, Tribute, Moxy, Aloft, and Element; the most well-known are Sheraton, Marriott, and Courtyard.
The cost and hassle of owning the majority of its properties are not borne by Marriott International Inc. (NASDAQ:MAR). Rather, it runs an asset-light company that generates revenue through managing properties and brand licensing. More than 200 million members make up the firm’s enormous loyalty program, which keeps guests returning.
Marriott International Inc. (NASDAQ:MAR) has benefited from strong travel demand, as seen by increases in occupancy and revenue in 2023 and 2024. It is a great option for long-term value because of its scope and size.
In the third quarter of 2024, Marriott International Inc. (NASDAQ:MAR) recorded approximately a 6% year-over-year net room increase due to ongoing development. Group RevPAR increased 10%, with 2025 group revenues tracking 7% higher, while Global RevPAR rose 3%, backed by 2.5% ADR growth. The EMEA and APAC areas, excluding China, saw a noteworthy 9% growth in international RevPAR, which rose 5% overall. Marriott Bonvoy achieved a record quarter for enrollments, reaching over 219 million members. A record 585,000 rooms were added to the development pipeline, a 5% increase driven by substantial conversion activity.
Terry Smith’s Fundsmith LLP was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 4.27 million shares worth $1.06 billion as of Q3.
4. Caesars Entertainment Inc. (NASDAQ:CZR)
Number of Hedge Fund Holders: 67
One of the Best Leisure Stocks, Caesars Entertainment, Inc. (NASDAQ:CZR) operates about 50 domestic casino properties in Las Vegas (49% of 2023 EBITDAR before corporate expenses) and regional (48%) markets. In 2023, the company generated minimal EBITDA from its digital assets and managed properties. Following Eldorado’s 2020 acquisition of Caesars, the US presence of Caesars nearly doubled. Eldorado opened its first casino in 1973 in Reno, Nevada, and before combining with legacy Caesars, had acquired over 20 facilities. The company owns the brands Flamingo, Harrah’s, Tropicana, Bally’s, Isle, and Caesars. Additionally, the company owns the US division of William Hill, a digital sports betting platform (it sold the international division in 2022).
Caesars Entertainment Inc. (NASDAQ:CZR) has to implement a recapitalization plan that combines possible property sales with refinances to pay down its $11.7 billion in long-term debt. As a pioneer in the industry, CZR’s rewards database, which has 65 million members, offers stability against debt worries.
In Q3 of 2024, Caesars Entertainment Inc. (NASDAQ:CZR) reported strong results in both the digital and non-gaming categories. In particular, Las Vegas generated a record non-gaming revenue of $1 billion, led by high hotel and food and beverage cash revenue and 97.1% occupancy. The Caesars Digital segment established a quarterly adjusted EBITDA record of $52 million, up from $2 million the year before, and achieved a 41% YoY rise in net revenue. Improved hold and a 55% volume rise drove an 83% increase in iGaming revenue. Significant cash proceeds for debt reduction were obtained through the sale of successful assets, such as the LINQ Promenade and the World Series of Poker. The group and convention market in Las Vegas showed significant momentum, with a promising outlook through 2025.
Deutsche Bank maintained its Buy recommendation on Caesars Entertainment Inc. (NASDAQ:CZR) shares and increased the firm’s price objective from $56 to $58. The company revised its price objective and modified its forecasts for gaming firms to reflect the shift from 2025 to 2026 as the foundation year for its assessment.
Ken Griffin’s Citadel Investment Group was the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 3.43 shares worth $143.15 million as of Q3.
Buckley Capital stated the following regarding Caesars Entertainment, Inc. (NASDAQ:CZR) in its Q3 2024 investor letter:
“We recently added Caesars Entertainment, Inc. (NASDAQ:CZR) to our portfolio at an average price of ~$37 per share. We believe that in owning CZR, we are getting world-class assets in both its owned casino real estate and digital businesses – which will comprise almost 70% of 2025 EBITDA – while paying a rock-bottom price. With three important catalysts about to materialize in the next 12 months – significant deleveraging, the digital business inflecting to substantial profitability, and massive FCF generation – we believe investor enthusiasm will turn more positive and the shares will re-rate higher. Caesars currently has an $8.6 billion market cap. We believe it could trade 50% to 100% higher within the next 12-24 months.
CZR as it exists today was formed in July 2020 by the merger of legacy Caesars Entertainment and Eldorado Resorts. Eldorado’s management, led by CEO Tom Reeg, who has an outstanding track record of increasing shareholder value, took over CZR’s operations. Reeg’s focus on maximizing long-term FCF and deleveraging the business aligns with shareholders’ interests. He holds 700,000 shares when fully vested (worth $25 million)…” (Click here to read the full text)
3. Hilton Worldwide Holdings Inc. (NYSE:HLT)
Number of Hedge Fund Holders: 68
One of the Best Leisure Stocks, Hilton Worldwide Holdings Inc. (NYSE:HLT) is a well-known name in the hotel business. From the upscale Waldorf Astoria Hotels & Resorts to the more affordable Hampton by Hilton Hotels, it offers a portfolio of 24 prominent hotel brands. The company’s development pipeline reached a record 462,400 rooms in 2023, and the hotel firm established an exclusive alliance with Small Luxury Hotels of the World.
Like Marriott, Hilton Worldwide Holdings Inc. (NYSE:HLT) has a strong loyalty program that keeps visitors coming back. There are currently over 200 million members of Hilton Honors. The firm’s mid-single-digit percentage of hotel rooms worldwide and its 20% share of all industry pipeline rooms under construction serve as indicators of the strength of its brand.
Hilton Worldwide Holdings Inc. (NYSE:HLT)’s pricing power is strengthened by its growing portfolio, which includes LivSmart Studios, Spark by Hilton, and acquisitions like Graduate Hotels and Nomad, even in the face of a slight drop in travel demand. Spark presents a substantial growth driver because of its potential for thousands of units.
In Q3 2024, Hilton Worldwide Holdings Inc. (NYSE:HLT) reported a 6.26% YoY rise in revenue, mostly due to improvements in occupancy, ADR (average daily rate), and franchise and management fee revenues. The business opened a record 531 hotels, adding more than 36,000 rooms and achieving the largest net unit growth (7.8%) in its history. Strong customer loyalty has been shown by the company’s achievement of 200 million Hilton Honors members. Globally, RevPAR increased by 4% in the Americas outside of the U.S. and 7% in Europe.
For the third quarter of 2024, adjusted EBITDA was $904 million, up 8% year over year, and adjusted EPS was $1.92. The number of rooms in the development pipeline increased by 8% year over year, with nearly half of them still under construction and 60% of them outside of the United States. Furthermore, group booking trends are still strong, with future bookings for 2025 rising by 10% and Group RevPAR up 5% YoY.
Bill Ackman’s Pershing Square was the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 7.37 million shares worth $1.70 billion as of Q3.
2. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 76
The Walt Disney Company (NYSE:DIS) is most recognized for its vacation spots, which include its own cruise line, amusement parks, and hotels located on three continents. The business also operates streaming, merchandising, television, and movies.
Diversification helps the company deal with challenging periods, such as the COVID-19 epidemic. Disney was still able to make enormous amounts of revenue even after its theme parks closed. It has had great success with its streaming service portfolio.
Disney+ is the crown jewel, with over 150 million paid subscribers. The company also owns ESPN+ and Hulu. Over 220 million individuals use its streaming services globally.
Throughout the year, the company has suffered with the headwinds affecting the larger media business. These challenges include declining legacy media asset prices and difficulties in the online streaming business as a result of Netflix’s dominant position. In Q1 of 2024, The Walt Disney Company (NYSE:DIS) had a 22% decline in operating income, which was caused by an 8% decline in revenue. Nonetheless, the company seems to be effectively improving its situation. For the first time, its streaming division turned a profit in Q3 of 2024 ($47 million).
The Walt Disney Company’s Q4 2024 revenues increased by 6% to $22.6 billion from $21.2 billion in the same quarter the previous year. Revenues for the entire year increased by 3% to $91.4 billion from $88.9 billion the year before. Disney’s operating income from its Entertainment division increased by 23% in the fourth quarter of 2024, while its DTC streaming operations witnessed a 14% gain in ad revenue. Additionally, the Experiences segment recorded record revenue for the whole year, with a 1% increase in Q4 2024 sales. In addition, ESPN’s domestic ad revenue jumped by 7% YoY in Q4 of 2024.
Rosenblatt maintained its Buy recommendation on The Walt Disney Company (NYSE:DIS) shares and increased the price objective from $122 to $135. In a research note, the analyst informs investors that the company’s “build up for growth,” as described by Disney’s CFO during a media conference last week, “looks doable — especially given recent momentum.” According to the company, this justifies a more positive assessment of the shares’ value. In a research note, the analyst informs investors that a re-rating for Disney can be bolstered by growing confidence in the company’s growth trajectory and portfolio durability, as well as a decreased concern about exposure to secular pressures on linear TV and competition in streaming.
Ken Griffin’s Citadel Investment Group was the largest stakeholder in the firm from among the funds in Insider Monkey’s database. It owns 10.08 million shares worth $970.35 million as of Q3.
1. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 93
The Best Leisure Stock, Booking Holdings Inc. (NASDAQ:BKNG) is the world’s largest online travel agency in terms of revenue. It provides booking and payment services for hotels and other accommodation rooms, airline tickets, rental cars, restaurant reservations, cruises, experiences, and other vacation packages. Several branded travel booking websites, including Booking.com, Agoda, OpenTable, and Rentalcars.com, are owned and operated by the firm. It has now made its foray into the travel media market with the acquisition of Kayak and Momondo. Online reservation transaction fees provide the lion’s share of revenue and earnings.
The company’s network advantage and financial health are both excellent. Advanced marketing and technology scalability support its strong position in the Asia-Pacific area, continued leadership in Europe, and expanding presence in restaurants, experience, travel, and hotel booking.
Booking Holdings Inc. (NASDAQ:BKNG) had a strong third quarter, generating $8 billion in revenue, up 9% YoY, and $3.7 billion in adjusted EBITDA, up 12%. A 14% increase in hotel nights at alternative lodgings and a 10% increase in listings to 7.9 million helped to support the 16% year-over-year gain in adjusted EPS. Connected trip transactions increased by more than 40% year on year, primarily due to advancements in AI such as an AI trip planner and Penny, a generative AI travel assistant. Asia had strong growth, exceeding pre-pandemic levels with double-digit expansion, accounting for 24% of global room nights in the last year. Bookings made through mobile apps and direct channels also made a substantial contribution, with both falling between the mid-50% range of room nights.
The platform currently has over 29 million postings and over 3.4 million properties, while the business is growing into new regions and creating new products and services.
Mizuho maintained its Outperform rating on Booking Holdings Inc. (NASDAQ:BKNG) shares and increased the firm’s price objective from $5,400 to $6,000. The company’s outlook for the shares is still positive through 2025. The consensus fiscal 2025 room night growth of 7% for Booking seems modest, according to Mizuho’s analysis by geography. By 2025, it anticipates that the company’s EBITDA will be in the mid-teens, with revenue increasing more quickly than expenses due to automation and headcount reductions.
Ken Fisher’s Fisher Asset Management was the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 418,742 shares worth $1.76 billion as of Q3.
Overall, Booking Holdings Inc. (NASDAQ:BKNG) ranks first on our list of the best leisure and recreation services stocks to buy now. While we acknowledge the potential for BKNG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BKNG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. 10 Best Leisure and Recreation Services Stocks to Buy Now is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
