Booking Holdings (BKNG) Stock Drops Despite Market Gains: Important Facts to Note

Zacks
02-12

Booking Holdings (BKNG) closed the latest trading day at $4,897.32, indicating a -0.33% change from the previous session's end. The stock's change was less than the S&P 500's daily gain of 0.03%. Elsewhere, the Dow saw an upswing of 0.28%, while the tech-heavy Nasdaq depreciated by 0.36%.

Shares of the online booking service have appreciated by 3.14% over the course of the past month, underperforming the Retail-Wholesale sector's gain of 9.07% and the S&P 500's gain of 4.19%.

The investment community will be paying close attention to the earnings performance of Booking Holdings in its upcoming release. The company is slated to reveal its earnings on February 20, 2025. On that day, Booking Holdings is projected to report earnings of $35.75 per share, which would represent year-over-year growth of 11.72%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.19 billion, up 8.59% from the year-ago period.

Investors should also take note of any recent adjustments to analyst estimates for Booking Holdings. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.18% lower. Booking Holdings is currently a Zacks Rank #3 (Hold).

From a valuation perspective, Booking Holdings is currently exchanging hands at a Forward P/E ratio of 23.58. For comparison, its industry has an average Forward P/E of 21.96, which means Booking Holdings is trading at a premium to the group.

We can additionally observe that BKNG currently boasts a PEG ratio of 1.7. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Internet - Commerce industry was having an average PEG ratio of 1.13.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 65, finds itself in the top 26% echelons of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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