1) Booking Holdings Inc. (NASDAQ:BKNG)
Forward P/E Ratio as of 13 September: 19.23x
Number of Hedge Funds: 96
Booking Holdings Inc. (NASDAQ:BKNG) operates as an online travel company. It offers a platform that allows travel reservations, accommodation reservations, rental cars, and vacation packages.
Booking Holdings Inc. (NASDAQ:BKNG)’s network advantage is the strongest in the industry, and the company has a focus on expanding its travel supply offerings. The company’s global online travel agency leadership position should increase over the next decade as a result of its healthy position in Asia-Pacific and leadership position in Europe. Also, the market share can further be strengthened through expansion in vacation rentals, restaurant bookings, flights, and payments. All these factors are supported by Booking Holdings Inc. (NASDAQ:BKNG)’s leading marketing and technology scale.
The company released its 2Q 2024 financial results, with total revenues coming at $5.9 billion, an increase of 7% as compared to the prior-year quarter (~9% rise on a constant-currency basis). The merchant revenues saw an increase while agency revenues declined in 2Q 2024 on a YoY basis because of the ongoing shift from agency revenues to merchant revenues at Booking.com.
Advertising and other revenues increased due to growth in advertising revenues at Booking.com and growth at OpenTable. Booking Holdings Inc. (NASDAQ:BKNG) remains well-positioned for continued growth as a result of a shift in traveller preferences and the company’s ability to adapt to the evolving market. The company’s diverse service offerings are expanding, with a focus on integrating AI and technology playing a critical role in this growth.
Analysts at Royal Bank of Canada initiated coverage on the shares of Booking Holdings Inc. (NASDAQ:BKNG) and restated an “Outperform” rating, giving a price target of $3,900.00 on 5th August. As per Insider Monkey’s 2Q 2024 data, Booking Holdings Inc. (NASDAQ:BKNG) was in the portfolios of 96 hedge funds.
Wedgewood Partners, an investment management company, released its second-quarter 2024 investor letter. Here is what the fund said:
“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 BKNG as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than the ones mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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