1. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 93
Booking Holdings Inc. (NASDAQ:BKNG) is a major player in the online travel and restaurant reservation industry. It operates several well-known brands that help consumers plan and book various travel-related services. Its flagship Bookings.com platform offers access to about 3.4 million properties across more than 220 countries, including places to stay such as hotels, apartments, hostels, and vacation homes. Through its other brands, the company also offers airline ticket booking, car rentals, restaurant reservations, and vacation packages.
Booking Holdings Inc. (NASDAQ:BKNG) has not only fully recovered from the pandemic effects but is posting impressive financial results. Its operating income for the fiscal third quarter of 2024 was $3.2 billion, which is well above the pre-pandemic value of $2.4 billion in Q3 2019 and also shows growth on a year-over-year basis. It posted better-than-expected results across all major indicators. The Room Nights Booked increased 8% year-over-year, whereas the Gross Travel Bookings grew 9% during the same time.
As a result of larger booking values, stronger growth in the Asian Market, and resilience in Europe, Booking Holdings Inc. (NASDAQ:BKNG) grew its total revenue by 9% year-over-year to $8 billion. The company is still in the early stages of AI integration and management noted that it aims to improve customer experiences and streamline operations, with initiatives such as AI travel assistant. This integration is expected to further improve the platform thereby attracting more users. Looking ahead, management expects room nights to grow between 4% and 6% in the fourth quarter of 2024, driven by healthy demand for travel.
Wedgewood Partners stated the following regarding Booking Holdings Inc. (NASDAQ:BKNG) in its Q2 2024 investor letter:
“Booking Holdings Inc. (NASDAQ:BKNG) contributed to performance as travel spending across the U.S. and Europe remains quite healthy, whereas the Company took share in alternative accommodations, and looks set to expand margins after a few years of reinvestment. The Company has also been aggressively reducing its share count at reasonably attractive valuation multiples. Booking should be able to compound earnings at an attractive, double-digit rate for the next few years given these various initiatives.”
While we acknowledge the potential of Booking Holdings Inc. (NASDAQ:BKNG) to grow, our conviction lies in the belief that 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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