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Alternative-accommodation supply, better product and large-partner integrations could extend growth while procurement savings fund the required investment.
Consolidated annual revenue growth below 5% for two consecutive fiscal years.
Strong Buy. The report-date price of $193.29 stands below Fair value of $292.84.3
The shares also stand below Potential value of $368.47, but Fair value remains the main reference.
The main risk is a merchant-led slowdown. If revenue growth stays below 5% for two years, necessary investment could weaken both profit and cash.7
The strongest upside driver is cash-funded platform investment. Better inventory, product and partner distribution can lift sales while procurement savings protect profitability.45
FY2025 operating cash flow was $9.41 billion and free cash flow was $9.09 billion.56
Inventory improvements and large-partner integrations could broaden customer choice and distribution.4
Merchant scale and connected-trip activity can link customer demand with broader inventory, although disclosed conversion and retention measures do not yet prove lasting reinforcement.47
Strong Buy because the valuation gap is supported by cash generation and credible platform investment options.5
Its mission is to make it easier for everyone to experience the world. Booking Holdings Inc. aims to provide consumers with a best-in-class experience with tailored planning, payment, language, and other options seamlessly connecting them with its travel service provider partners.
Booking Holdings Inc. offers these services through five primary consumer-facing brands: Booking.com, Priceline, Agoda, KAYAK, and OpenTable: In the near term, the company is focused on providing consumers the ability to build a complete travel itinerary from AI-powered inspiration and planning to in-trip suggestions for attraction options.
The central stress is a merchant-led slowdown while investment remains necessary. Lower sales growth and weaker spending productivity would pressure profit and cash together.
Booking’s advantage depends on inventory breadth, product integration and partner reach. Better choice can lift conversion, attract more supply and reinforce the merchant business, but U.S. alternative accommodations still need investment.
Strong reported cash generation shows that the advantages currently produce owner value, but cash generation is an outcome rather than a moat source.5
The highlighted cell is Fair value when every assumption sits at its base level ($292.84). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $7.3B after modeled capex of $322.0M, with terminal value at 68.3% of . A sudden drop in free cash flow is not projected unless capital spending relative to , reinvestment, or resets materially.
A broad beat supports merchant-led compounding.
In-line results preserve near-term visibility.
Industry capital spending was 1.3% of revenue and 1.12 times depreciation as of 2026-09-01, suggesting modest asset expansion rather than a large capacity build.
Travel demand can support Booking when capacity normalizes and travelers keep shifting among domestic and regional options. Management reported resilient demand despite route disruption.
Higher travel costs, disrupted transit corridors and macro volatility can slow room nights and bookings before platform investments produce returns.
Use a normal core position, not an oversized position based on Potential value. The valuation gap is favorable, but later growth, reinvestment needs and the repurchase path remain less visible than FY2027 estimates.13
Keep sizing tied to delivered FY2026–FY2027 results and a cash-funded investment and repurchase plan, not the highest valuation outcome.
The report-date price offers a favorable gap to Fair value, supported by strong FY2025 cash generation and dated FY2027 forecasts.35
Add in stages while revenue, profitability and cash remain consistent with the base thesis.
Use a smaller staged position because post-FY2027 growth and the long-run repurchase path require further evidence.13
Strong Buy: the $193.29 report-date price is below Fair value of $292.84, while FY2025 cash generation supports the operating case.35
The view depends on merchant-led growth remaining strong enough to fund product, inventory and marketing needs without sustained margin erosion.
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The records this analysis drew on, as they stood when it was run.
Merchant concentration amplifies weaker transaction economics, while continued investment reduces profit and cash. Recovery requires renewed growth without further margin erosion.
If EBIT margin stays below 29% for two fiscal years, necessary product and marketing spending would absorb procurement savings and weaken earnings and cash generation.4
Post-FY2027 revenue growth below 6% for two years would show that inventory and partner initiatives did not extend growth, prompting investors to pay less for future earnings.4
A cost of equity above 12.0828% would reduce the present value of long-dated earnings even if operations remained profitable.2
The five developments that would weaken our investment case.
A sustained slowdown would show that merchant scale and new inventory are not overcoming softer demand or competitive pressure, reducing sales growth and operating leverage.
Current:Management expected Q3 revenue growth of 4%–6% in 2026.
Alert ifBelow 5% for two consecutive fiscal years.
This breach would indicate that product, inventory and marketing costs are outrunning procurement gains, weakening earnings and cash available for investment or distributions.
Current:FY2025 EBIT margin was 32.79%.
Alert ifBelow 29% for two consecutive fiscal years.
Weak growth after the visible forecast period would suggest that B2B distribution and inventory initiatives are not extending platform demand or partner economics.
Current:The FY2027 revenue forecast was $32.01 billion as of 2026-09-08.
Alert ifBelow 6% for two consecutive post-FY2027 fiscal years.
A higher required return would make future earnings worth less today, compressing value even without an operating downturn or liquidity problem.
Current:10.0828% as of 2026-09-08.
Alert ifAbove 12.0828% within 12 months.
Persistently weaker cash collection would reduce funds for strategic investment and repurchases, making per-share earnings growth more dependent on financing or lower spending.
Current:FY2025 operating cash was $9.41 billion versus $5.40 billion of net income.
Alert ifOperating cash at or below 0.8 times net income for two fiscal years.
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Project SBC-adjusted EPS, discount each year's earnings at cost of equity, then add a Gordon-growth terminal value.
Limitation: Terminal value is 61.3% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and at , then adjust for signed per current share.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Solve for the growth rate that makes the model value equal the report-date share price.
Merchant scale and strong cash generation support compounding, but later growth fades because measurable forecast visibility ends after FY2027.15
Upside persists if procurement savings fund growth work and partner distribution extends demand beyond the visible forecast period.4
A broad miss links demand and investment pressure.
Slower growth weakens leverage.
Performance drives consolidated results.7
Improvement broadens growth.4
Adoption can broaden distribution.4
| $10.96B |
| $17.09B |
| $21.37B |
| $23.74B |
| $26.92B |
| +25.2% |
| Gross profit | $10.96B | $17.09B | $21.37B | $23.74B | $26.92B | +25.2% |
| Operating income | $2.50B | $5.10B | $5.84B | $7.56B | $8.83B | +37.1% |
| Net income | $1.17B | $3.06B | $4.29B | $5.88B | $5.40B | +46.8% |
| EPS (diluted) | $1.13 | $3.05 | $4.70 | $6.91 | $6.62 | +55.7% |
| EBITDA | $2.40B | $4.92B | $7.04B | $9.34B | $9.22B | +40.0% |
| R&D | — | — | — | — | — | — |
| SG&A | $2.84B | $3.23B | $4.85B | $4.39B | $4.26B | +10.7% |
The cash profile supports resilience because reported profit became deployable cash in FY2025. The key test is whether that remains true while product and inventory spending continues.46
Diluted average shares declined from 913.25 million in FY2023 to 815.975 million in FY2025. Future per-share gains require repurchases to remain cash-funded after investment and dividends.
The cited evidence supports strong cash generation, but this section does not establish a comparable multi-year return-on-invested-capital series.
No quantified spread is presented. The enterprise discount rate was 9.3905% as of 2026-09-08.
The resulting operating margin was 32.79% for FY2025.
Maintaining similar profitability requires procurement gains to offset ongoing product, inventory and marketing spending.
Cash from operations materially exceeded FY2025 net income of $5.40 billion.
This supports reinvestment and distributions, but it does not prove that every future repurchase can be funded after strategic spending.
| Revenue | $26,917,000,000 |
|---|---|
| Cost of revenue | $0 |
| Gross profit | $26,917,000,000 |
| Operating expenses | $18,092,000,000 |
| Operating income | $8,825,000,000 |
| Non-operating items and tax | -$3,421,000,000 |
| Net income | $5,404,000,000 |
| Total assets | $29,264,000,000 |
|---|---|
| Cash | $17,203,000,000 |
| Current assets | $22,264,000,000 |
| Total liabilities | $34,842,000,000 |
| Current liabilities | $16,698,000,000 |
| Shareholder deficit | $5,578,000,000 |
| Net income | $5,404,000,000 |
|---|---|
| Operating inflow | $9,409,000,000 |
| Depreciation and amortization | $623,000,000 |
| Stock-based compensation | $617,000,000 |
| Other operating adjustments | $2,765,000,000 |
| Operating cash flow | $9,409,000,000 |
| Cash available | $26,497,000,000 |
| Beginning cash | $16,193,000,000 |
| Exchange-rate effect | $895,000,000 |
| Investing outflow | $313,000,000 |
| Financing outflow | $8,915,000,000 |
| Share repurchases | $6,440,000,000 |
| Dividends paid | $1,248,000,000 |
| Net debt repayment | $1,289,000,000 |
| Ending cash | $17,269,000,000 |
| Investing cash flow | -$313,000,000 |
| Financing cash flow | -$8,915,000,000 |
Source: SEC EDGAR · Filed 2026-02-18 · SEC EDGAR
| Revenue by business category | Revenue | Share | YoY |
|---|---|---|---|
| Merchant Revenue | $17.8B | 66% | 25.5% |
| Agency Revenue | $8B | 29.6% | -6.5% |
| Advertisingandotherrevenues | $1.2B | 4.4% | 11.3% |
Point-in-time financial data used in the 2026-09-08 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | $10.7B | $3.2B | $2.1B | $4B | $3.8B | $220M | $309M | $249.7M | $1B | $0 | — | -$3.3B | -$1M | — | $2.1B | $4.3B | $6.2B | 27.1% | — | 7.5% | — |
| 2017-12-31 | $12.7B | $5B | $2.3B | $4.7B | $4.4B | $288M | $363M | $261.3M | $1.8B | $0 | — | -$4.2B | -$79M | $2.1B | $2.6B | $7.4B | $8.8B | 35.8% | — | 7.2% | — |
| 2018-12-31 | $14.5B | $5.5B | $4B | $5.3B | $4.9B | $442M | $426M | $331M | $6B | — | — | $2.2B | -$7.4B | $2.6B | $2.6B | $6.3B | $8.6B | 36.8% | — | 7.2% | — |
| 2019-12-31 | $15.1B | $6.9B | $4.9B | $4.9B | $4.5B | $368M | $469M | $325M | $8.2B | — | — | $7.1B | -$8.2B | $2.6B | $6.3B | $7.3B | $7.6B | 35.5% | — | 6.5% | — |
| 2020-12-31 | $6.8B | $1.6B | $59M | $85M | -$201M | $286M | $458M | $255M | $1.3B | — | — | $2.6B | $1.5B | $6.3B | $10.6B | $11.1B | $12.4B | -9.3% | — | 6.0% | — |
| 2021-12-31 | $11B | $2.4B | $1.2B | $2.8B | $2.5B | $304M | $421M | $376M | $163M | — | — | -$998M | -$1.2B | $10.6B | $11.2B | $11.2B | $11.3B | 22.8% | — | 6.3% | — |
| 2022-12-31 | $17.1B | $4.9B | $3.1B | $6.6B | $6.2B | $368M | $451M | $404M | $6.6B | $0 | $1.7B | -$518M | -$4.9B | $11.2B | $12.3B | $12.4B | $12.5B | 29.9% | — | 8.8% | — |
| 2023-12-31 | $21.4B | $7B | $4.3B | $7.3B | $7B | $345M | $504M | $530M | $10.4B | $0 | $1.4B | $1.5B | -$8.9B | $12.3B | $12.1B | $12.7B | $14.2B | 27.3% | — | 9.0% | — |
| 2024-12-31 | $23.7B | $9.3B | $5.9B | $8.3B | $7.9B | $429M | $591M | $599M | $6.5B | $1.2B | $3.5B | $129M | -$4.2B | $12.1B | $16.2B | $16.2B | $16.6B | 31.8% | — | 9.8% | — |
| 2025-12-31 | $26.9B | $9.2B | $5.4B | $9.4B | $9.1B | $322M | $623M | $617M | $6.4B | $1.2B | -$1.3B | -$313M | -$8.9B | $16.2B | $17.3B | $17.8B | $18.7B | 32.8% | — | 9.1% | — |
Booking Holdings Inc. (BKNG) trades at 15.8x forward earnings against a peer median of 20.6x. Its EV/EBITDA of 14.3x compares with a peer median of 16.5x. The comparison uses 4 peers: Airbnb Inc., The TJX Companies Inc., McDonald's Corporation and Royal Caribbean Cruises Ltd., as of 2026-09-07 to 2026-09-08.
| Broader digital inventory | positive | More alternative-accommodation supply can improve customer choice, but U.S. execution remains an identified improvement area. |
| International demand variability | negative | Most FY2025 revenue was attributed outside the United States, while the supplied disclosure does not define that attribution as traveler origin or currency exposure. |
Booking has broad geographic exposure, but competition can raise acquisition spending and weaken growth. The mixed comparison set is useful only as a boundary because business models and margins differ.
| Below Fair value |
| Build the position in stages. |
| Staging limits exposure if demand slows before inventory and partner investments mature. |
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Limitation: Terminal value is 68.3% of this model's value, above the 60% level at which the methodology flags concentration; the value leans on the years beyond the explicit forecast.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
| The TJX Companies Inc. |
| 22.9x |
| 2.3x |
| 17.3x |
| 62.2% |
| 10.9% |
| MCD | McDonald's Corporation | 18.3x | 6.5x | 15.7x | — | 46.5% |
| RCL | Royal Caribbean Cruises Ltd. | 13.1x | 3.8x | 13.5x | 44.7% | 27.1% |
