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Earlier this week I wrote that we expected Booking.com to report quarterly earnings of about $22 per share. Well, those results were out last night and the number was $22.44 per share. The stock rose 5% after-hours. CEO Glenn Fogel said that the Norwalk, Connecticut company had a "solid start to the summer travel season".
Booking.com stock (code BKNG) trades at just below $2 000 a share and the company has a market value of $79 billion. Remember that they own and operate several travel fare aggregators and travel fare metasearch engines, including its namesake and flagship Booking.com, Priceline.com, Agoda.com, Kayak.com, Cheapflights, Rentalcars.com, Momondo, and OpenTable. It operates websites in about 40 languages and 200 countries. A large part of its business is outside of the US.
Guidance for future revenue and profits was raised. Notably, the company still expects solid bookings in Asia, despite tricky US-China relations and street-protests in Hong Kong. Fogel said, "in the long run, there's going to be a lot more Chinese travellers outbound, so it's important that one doesn't just pull back because of any sort of short-term blip".
Gross travel bookings were $25 billion in the quarter, up 5% from a year earlier. Room nights booked during the quarter increased 12% from the period a year-earlier, to 213 million. Those are big numbers!
In my view, Booking.com needs more US operations. If I was running the company, I'd consider a knock-out merger offer for smaller rival Expedia, which "only" has a market value of $21 billion. If that won't work, they should approach Google and suggest a merger. Imagine the synergies within the Google Maps app!
Investors should buy this one for their portfolio now. If you own them already, consider buying some more. If you are going somewhere, use their service to book your flights and hotel room (you should always support the companies in which you invest).