Booking Holdings, Inc. Net profit margin Y/Y change for December 2022 increased by 47.13% causing a rise in EPS. the company is expected to earn $155.43 per share on $21.95 billion in revenues.
The stock has an impressive record of positive earnings surprises, as it hasn’t missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 23, 2023, Booking Holdings reported EPS of $24.74 versus consensus estimate of $20.97 while it beat the consensus revenue estimate by 4.98%.
For the current fiscal year, Booking Holdings is expected to post earnings of $127.01 per share on $19.71 billion in revenues. This represents a 27.24% change in EPS on a 15.36% change in revenues. For the next fiscal year, the company is expected to earn $155.43 per share on $21.95 billion in revenues. This represents a year-over-year change of 22.37% and 11.36%, respectively.
Booking Holdings may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Have you been paying attention to shares of Booking Holdings (BKNG)? Shares have been on the move with the stock up 1.2% over the past month. The stock hit a new 52-week high of $2660.86 in the previous session. Booking Holdings has gained 31.6% since the start of the year compared to the 8.1% move for the Zacks Retail-Wholesale sector and the 17.9% return for the Zacks Internet – Commerce industry.
Booking Holdings has a Value Score of C. The stock’s Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 20.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.3X. On a trailing cash flow basis, the stock currently trades at 23.1X versus its peer group’s average of 13.4X. Additionally, the stock has a PEG ratio of 1.25. This isn’t enough to put the company in the top echelon of all stocks we cover from a value perspective.
Due to high booking from blue chips business executives companies travelling globally, BKNG is still a good buy to invest in.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Booking Holdings currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Booking Holdings fits the bill. Thus, it seems as though Booking Holdings shares could have a bit more room to run in the near term.
How Does BKNG Stack Up to the Competition?
Shares of BKNG have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Solo Brands, Inc. (DTC). DTC has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of A.
Earnings were strong last quarter. Solo Brands, Inc. beat our consensus estimate by 43.48%, and for the current fiscal year, DTC is expected to post earnings of $0.97 per share on revenue of $534.04 million.
Shares of Solo Brands, Inc. have gained 72.6% over the past month, and currently trade at a forward P/E of 7.42X and a P/CF of 9.08X.
The Internet – Commerce industry is in the top 31% of all the industries we have in our universe, so it looks like there are some nice tailwinds for BKNG and DTC, even beyond their own solid fundamental situation.
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