To The Moon

My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?

"Why not both" I asked myself ?

Wouldn't there be more upsides comparatively speaking ?

Having put the theory to test on different company types (see below for details); this time I wanted to try it on yet another Travel Service stock; after trying it out on Expedia.com.

Putting $Booking Holdings(BKNG)$ to the test & see if it fits the bill.

Sidetrack: Below are stocks that I have covered. Interested ? Click to read.

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• Expedia Inc

• S'pore Airline Terminal Svcs (SATS)

• Under Armour

• Paypal Inc

• ExxonMobil

• Coca Cola Inc

• Pepsi Co Inc

• Kraft Heinz Company

• Kellogg's

• McDonald's Inc

• Uber Technologies

• CVS Health Corp

• Alphabet (Google)

• Amazon Inc

• Apple Inc

• Meta Platforms (Facebook)

• T-Mobile Inc

• United Parcel Services (UPS)

• AMD semiconductor

• Lam Research Inc

• General Motors

• Direct competitor of $Expedia(EXPE)$ that I have just covered (click above link to access)

• An American travel technology company

• Founded in 1996, (a 27 years young company)

• Founder was Jay S. Walker

• Original name was Priceline.com. It was changed to Booking.com on 27 Feb 2018.

• It was listed in Nasdaq on 30 Mar1999 at $16 per share

• Similar to Expedia.com, it is also owns & operates several travel fare aggregators and travel fare metasearch engines.

• They are (a) Booking.com, (b) Priceline.com, (c) Agoda.com, (d) Kayak.com, (e) Cheapflights, (f) Rentalcars.com, (g) Momondo, and (h) OpenTable.

• It operates websites in about 40 languages and over 200 countries.

• Its main sources of revenue are (1) hotel rooms bookings, (2) car rental (day), (3) airplane tickets and (4) advertising fees

• In 2022, it ranked 340th position in Fortune 500 list of the largest US corporations by revenue

• It grew to its current mega cap size via strategic acquisitions between 2004 and 2022.

• Every acquisition served to strengthen and fortify its position in the Online Travel platform.

In 2022, a year where US market had been hammered by extreme volatility and ease of covid pandemic restrictions - how did Travel company - Booking Holdings fare when matched against Expedia ?

Booking Holdings - Summary

• Revenue came in at $4.05 Billion vs $3.89 Billion (Wall st expectations) vs $2.98 Billion (Q4 2021); that’s a +35.91% gain.

• Net Income came in at $1.24 Billion vs $0.62 Billion (Q4 2021); that’s a +100% gain.

• Earnings per share (GAAP) was $31.92 vs $14.92 (Q4 2021); that’s a +113.94% gain

• Earnings per share (Non GAAP) was $24.74 vs $15.83 (Q4 2021); that’s a +56.29% gain.

Booking Hldgs - Revenue breakdown by Source

• Booking Holdings’ revenue stream comes from 3 sources (1) Agency, (2) Merchant and (3) Advertising & Other.

• When it comes to revenue contribution - Agency’s share is the largest at 50.6%; followed by Merchant at 44.0% and Others at 5.4%.

• However if growth by source is at play, for Q4 2022 - Merchant registered the strongest growth (& potential) at +71%; followed by Agency at +17% and then Others at +16%.

Further Analysis Of Sources - Agency & Merchant; Disregarding “Others”

Booking Hldgs - Gross Bookings details

• With the easing of covid lockdowns and restrictions gradually, the momentum for people to travel is slowly picking up momentum. This is evident in the bookings (hotel or cars or airtickets) dollar value between years 2021 & 2022.

• In value terms, both its Agency and Merchants contribute almost equal dollars to its revenue.

• However, the growth in its Merchant’s bookings is more significant (+86%) is more significant. Agency’s growth came in at +19%).

Booking Hldgs - Other Highlights

• As Travel activities picked up momentum; all three businesses core (Hotel rooms, Car rental and Airline tickets) all saw very healthy growth of between +28% and +50%.

• Its Operating Income also grew by +58.82% to $1.35 Billion vs $0.85 Billion (Q4 2021)

Booking Holding's CEO on Q4 2022 Results

Looking back at the full year of 2022, I am proud of our company's performance during what was a challenging and competitive environment. We are encouraged by the continued strength and resiliency of demand from travellers last year and into the new year, which we believe speaks to our consumers'strong desire to use our platforms when booking their travels.... Booking Hldgs, CEO, Glenn Fogel.....

Is Booking Hldgs - A Good Price Or A Good Company Or Both ?

Booking Hldg's current stock price > 28 Feb 2022 stock price by +16.06%. Amazing !!

Assessing the company on its own and against its peers, we could witness the followings :

Booking Hldgs - Earnings per share

• Its EPS has beaten Wall street analysts expectations consistently for the 4 quarters of 2022; coming thru for the company each and every time.

Booking Hldgs - Free cash flow between 2019 and 2022

• Cash flow from both Operations & Investing have “peaked” in 2020 before falling for almost the entire year of 2021 (when Covid was raging at its peak).

• Looking at above diagram for year 2022, it would be inferred that cash is once again picking up steam and rising gradually; signalling the spring-awakening of the travel industry.

Face To Face Peer Comparison

• In plain sight for year 2020 and 2021 where travelling was almost non-existent and the Fed was super “generous” with Quantitative Easing (QE); the returns by S&P 500 was undoubtedly the leader of the pack

• However in 2022, it was the complete reverse with the Fed embarking on a Quantitative Tightening mission, S&P 500 Total Return fell by -18%

• Throughout the 3 years, Booking Holdings managed to operate at its own pace and sets its own tone.

• In 2020 and 2021, it was not the worse performer

• However in 2022, in the face of adversity it was the “Best” poor performer coming in at -16% only

• If you compare the Q4 2022 earnings of (1) Booking Holdings & (2) Expedia - you would find that Booking Holdings’ returns are all at a different quantum value and far superior (if you asked me).

• At $2,521 a share, it better be !

• Do you think Booking Holdings is both a good price and good company to invest in now ?

• Do you think Booking Holdings is “better” than Expedia ?

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