1. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 93
YTD Share Price Decline as of August 29: 22.72%
Shares of Booking Holdings Inc. (NASDAQ:BKNG), the American travel technology firm, have suffered a year-to-date decline of about 23% as of August 29. However, the travel sector is seeing a recovery and the stock will potentially rebound on the back of this positive momentum in the industry.
On August 3, Booking Holdings Inc. (NASDAQ:BKNG) reported Q2 non-GAAP EPS of $19.08, beating market estimates by $1.41. The company’s revenue soared by 99.1% year-over-year, reaching $4.3 billion, but fell short of Wall Street’s consensus by $50 million. Gross travel bookings came in at $34.5 billion, an increase of 57% from the prior year quarter.
On August 4, Deutsche Bank analyst Lee Horowitz maintained a ‘Buy’ recommendation on Booking Holdings Inc. (NASDAQ:BKNG) but lowered the price target on the shares to $2,280 from $2,300. The company’s Q2 results continued to reflect the progress and resilience of the pandemic recovery, and Booking Holdings Inc. (NASDAQ:BKNG) showed a stabilization of the room night pattern into Q3, the analyst told investors in a research note.
According to Insider Monkey’s data, 93 hedge funds were bullish on Booking Holdings Inc. (NASDAQ:BKNG) at the end of June, compared to 99 funds in the prior quarter. Harris Associates is one of the leading shareholders of the company, with 616,383 shares worth over $1 billion.
Here is what LRT Capital Management had to say about Booking Holdings Inc. (NASDAQ:BKNG) in its Q2 2022 investor letter:
“Booking Holdings was formerly Priceline.com but has changed its name to reflect that source of most of its revenue: Booking.com. Booking.com is the largest online travel agency (OTA) in the world, connecting travelers and hotels. The company has over 2.3 million properties in 220 countries on its site, along with photos, reviews and details about the amenities offered by each property. The accommodations offered range from hotels, motels, homes & apartments, hostels, and bed & breakfasts. The company occupies a dominant position in the travel booking funnel and collects revenue from hotel reservations booked through its site. Booking.com is particularly strong in Europe, where chain hotels are less dominant and smaller independent hotel rely on it to fill their rooms.
In addition to Booking.com, the company owns agoda.com, priceline.com, rentalcars.com, OpenTable and the KAYAK flight search engine. Hotel bookings account for most of the revenue, but the company also offers car rental reservations, flights, vacation packages, cruises, tours, airport taxis, etc.
The company benefits from economies of scale in its investments in technology, national advertising, and customer loyalty programs. The business also has enormous network effects, as consumers are most likely to use a booking platform with the most properties, broadest availability of reviews and strong customer service. This in turn drives hotels to make their room inventory available on booking.com, which drives most of the reservation traffic for many boutique hotels, thus reinforcing the network effect. Of note, Booking.com operates two models: the agency model, where the company simply acts as an agent for a hotel and collects a fee, and the merchant model, under which Booking.com buys the room-night from the hotel, but then retains the ability to optimize the pricing on the room.
Also of note is the fact that the acquisition of Booking.com by Priceline.com is amongst the most successful and value creating M&A transactions of all time.”
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