Booking Holdings Inc.

(NASDAQ Global Select)
Back to all articles
Somewhat Bearish -35

Is Booking Holdings Stock Worth More Than Its Competitors?

Company update AI-generated analysis

πŸ“‰ BKNG stock lost 17.5% over the past year, marking the worst return among a peer group including Meta, Airbnb, Expedia, and Hyatt Hotels.

πŸ’° Booking retains 32.8% of revenue as operating profit compared to Airbnb's 22.5%, yet trades at only 16.8x earnings versus Airbnb's 34.9x multiple.

πŸ“‰ Revenue growth slowed to 8.0% in the last four quarters, roughly half of Airbnb's 16.7% pace, partly due to a $900 million FTC-related legal charge.

πŸ’³ The company now processes payments on about 75% of gross bookings, an increase of roughly 3 percentage points from the prior year.

πŸ€– AI tools helped reduce third-quarter customer service costs even as booking volumes increased during the period ended September 30, 2026.

✈️ Flight ticket revenue grew 19% in Q3, but the higher mix of flights lowered the overall revenue Booking keeps from each dollar booked.

πŸ“… Management expects adjusted revenue growth to decelerate to 0% to 2% in fiscal Q4 2026, slowing from a 9% pace in Q3.

πŸ’Έ Adjusted EBITDA is projected to remain flat as the company increases spending on flights, attractions, dining, and AI initiatives.

🌍 Guidance assumes the effects of the Middle East conflict on travel will persist through the end of fiscal year 2026.

🎯 BKNG maintains a long-term ambition for constant currency adjusted revenue growth of at least 8% despite short-term headwinds.

πŸ“Š The market valuation appears to assume continued slower growth relative to rivals, with early 2027 bookings serving as the primary counter-indicator.

πŸ—“οΈ Investors are advised to watch the February 2027 earnings report for management commentary on 2027 revenue growth expectations.

Bullish Signals
  • Booking retains a superior operating profit margin of 32.8% compared to competitor Airbnb's 22.5%, demonstrating strong profitability despite slower growth.
  • The company successfully expanded its payment processing share to approximately 75% of gross bookings, up from 72% a year ago, driving extra profit.
  • AI tools effectively reduced third-quarter customer service costs even as booking volumes rose, improving operational efficiency.
  • Flight ticket revenue climbed 19% in the third quarter, indicating continued demand for travel-related segments despite margin compression.
  • Early bookings for the first half of 2027 are characterized by management as healthy, providing a potential counterweight to current slowdown concerns.
Risk Factors
  • Revenue growth slowed significantly to 8.0% in the last four quarters, roughly half the pace of competitor Airbnb's 16.7% growth.
  • A $900 million legal charge linked to an FTC action directly cut third-quarter revenue and impacted overall performance.
  • Increased spending on flights, attractions, dining, and AI initiatives is projected to keep adjusted EBITDA flat in the upcoming quarter.
  • The higher mix of flight tickets in the portfolio lowered the revenue Booking keeps from each dollar booked during the third quarter.
  • Management explicitly assumes that the effects of the Middle East conflict on travel will persist through the end of fiscal year 2026.
Full Analysis
Booking Holdings (BKNG) stock underperformed its peer group over the past year, dropping 17.5% compared to a 9.8% gain for the S&P 500 and trailing competitors like Airbnb and Meta Platforms. Despite Booking retaining a higher operating profit margin of 32.8% versus Airbnb's 22.5%, its revenue growth of 8.0% was significantly slower than Airbnb's 16.7% pace during the four quarters ended September 30, 2026. This sluggish growth was partially attributed to a $900 million legal charge related to an FTC action that impacted third-quarter revenue. Investors are currently pricing BKNG at 16.8 times earnings, which is substantially lower than Airbnb's 34.9 multiple and Meta's higher valuation, reflecting market skepticism regarding its slower expansion relative to rivals who generate faster sales growth. Operationally, Booking has strengthened its payment processing capabilities, now handling payments on approximately 75% of gross bookings, up from 72% a year ago. Management credited AI tools for reducing customer service costs despite rising volumes, though revenue per dollar booked declined due to a higher mix of lower-margin flight tickets which climbed 19% in the third quarter. Looking ahead, management expects adjusted revenue growth to slow to 0% to 2% in the fourth quarter of 2026, down from 9% in the prior quarter, while projecting flat adjusted EBITDA due to increased spending on flights and AI. The company maintains a long-term ambition for at least 8% constant currency growth in adjusted revenue, with February 2027 earnings expected to provide commentary on 2027 performance. Analysts note that the current market valuation assumes BKNG will continue growing more slowly than its rivals regardless of its superior profitability. While early bookings for the first half of 2027 appear healthy, management warns these figures remain subject to change, particularly given ongoing concerns about the Middle East conflict's impact on travel through year-end.