Booking stock price has done well this year, and is nearing its all-time as focus now shifts to the upcoming financial results. The BKNG share price traded at $5,110 on Wednesday, its highest level since December 16. So, will it continue rising after releasing its quarterly numbers?
Booking Holding business is doing well
Booking Holding is the biggest player in the hotel and flight booking globally. It owns some of the best-known brands in the sector like Booking.com, Priceline, Agoda, and OpenTable.
Its brands have done well in the past few years as demand for travel stocks has surged around the world. Its annual revenue has surged from $6.7 billion in 2020 to over $23 billion in the trailing twelve months.
The company’s profitability metric has also surged in the past few years. Its annual profit jumped from $59 million in 2020 to $5 bilion in the TTM.
Booking Holdings business has benefited from the strong recovery of the travel industry after the Covid-19 lockdowns. Many people embraced revenge travel during that time for bing in a lockdown during the pandemic.
Other companies in the industry have done well in this period. Expedia Group business has had its annual revenue surge from $5.1 billion in 2020 to $13.6 billion last year. Similarly, Airbnb, a company that offers short-term rentals, made $3.37 billion in 2020 and $11 billion last year.
Read more: Booking (BKNG) vs Airbnb (ABNB): Which is the better travel stock?
Booking earnings ahead
The next important catalyst for the Booking stock price will be the upcoming earnings, which will provide more information about its business.
According to Yahoo Finance, analysts expect the numbers to show that its quarterly revenues rose by 8.28% in Q4 to $5.18 billion. The lowest estimate is its revenue to be $4.92 billion, while the higher side of the estimate is $5.27 billion. Booking has a long track record of doing better than estimates.
The estimated revenue figure will bring its annual number to $24.4 billion. Analysts expect that its annual revenue will get to $25.26 billion in 2025.
Booking’s profits are expected to keep growing, with the average estimate coming in at $36, up from $32 a year earlier. Its annual EPS will be $182, followed by $208 next year. Its numbers will likely be better than estimates as it has done in the past.
The most recent Booking Holdings numbers showed that its business thrived in the last quarter. Its room nights booked increased by 8%, while its revenue jumped by 9% to $8 billion. The company’s EBITDA rose to $3.7 billion during the quarter.
Booking is a fairly undervalued company considering that it has a large market share in a highly competitive and fragmented industry. It has a forward P/E ratio of 28, higher than the sector median of 17.2. The forward P/E figure is lower than the five-year average of 23.
Read more: Uber reportedly explored buying Expedia: here’s why it could be an undervalued gem for investors
Booking stock price analysis
The daily chart reveals that the BKNG share price has been in a strong bullish trend in the past few days. It has rebounded from a low of $4,603 in February to over $5,000 today.
Booking stock remains above the ascending trendline that connects the lowest swings since August last year. It has also moved above the 50-day Exponential Moving Average (EMA).
However, there are signs that the Booking stock price is slowly forming a double-top pattern whose upper side is at $5,330 and whose neckline is at $4,603. A double-top is a highly bearish sign.
Therefore, the Booking Holdings stock price will likely jump to $5,330 after earnings. If this happens, bulls will need to defend that level to invalidate the double-top pattern. Failure to do that could see it resume the downtrend and retest the neckline at $4,603.
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