BKNG Up 25% in a Year: Should You Buy, Hold or Sell the Stock?

Core Insights - Booking Holdings (BKNG) shares have increased by 25.4% over the past 12 months, significantly outperforming the Zacks Retail-Wholesale sector, which saw a 5.8% increase [1] - The company has shown strong growth in room nights and bookings, benefiting from a favorable travel demand environment [2][4] - BKNG's AI integration across its platforms is enhancing customer experience and operational efficiency [6][7] Financial Performance - In the fourth quarter, room nights grew by 13% year over year, surpassing expectations, with Europe showing particularly strong performance [3] - Gross bookings rose by 17% year over year in the same quarter, supported by increased flight bookings and higher Average Daily Rates [4] - Airline ticket bookings surged by 52% year over year in Q4 2024, aided by strong offerings from Booking.com, Agoda, and Priceline [5] Future Outlook - For Q1 2025, room night growth is projected to be between 5% and 7%, with gross bookings growth expected in the same range [8] - Revenue growth for the first quarter is anticipated to be between 2% and 4%, with the Zacks Consensus Estimate for revenues at $4.59 billion, indicating a 4% year-over-year increase [8] Challenges - Despite strong performance, BKNG faces a downward trend in earnings estimates, with a 14.18% decrease in the consensus estimate for Q1 2025 earnings per share [10] - Foreign exchange rate changes negatively impacted gross bookings growth by approximately 1 percentage point in Q4 2024 [11] - The company is experiencing intense competition from various players in the online travel booking industry, including Expedia, Tripadvisor, and Google [12]