Why Is Booking (BKNG) Stock Soaring Today

Max Juang /
2023/08/04 10:32 am EDT

What Happened:

Shares of online travel agency Booking Holdings (NASDAQ:BKNG) jumped 11% in the morning session after the company reported second-quarter results that beat analysts' expectations for revenue, gross bookings and earnings per share. Operating metrics such as hotel rooms and airline ticket sales came ahead of Consensus. Unit economics also moved in the right direction. 

Management added some positive comments on demand trends stating that "In the second quarter, we continued to see robust leisure travel demand, which helped drive stronger than expected room nights and gross bookings results in the quarter." Overall, this was a really good quarter that should please investors, especially after the company's closest peer Expedia reported somewhat disappointing results.

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What is the market telling us:

Booking's shares are somewhat volatile and over the last year have had two moves greater than 5%. But moves this big are very rare even for Booking and that is indicating to us that this news had a significant impact on the market's perception of the business. 

The previous big move was three months ago, when the stock dropped 5.86% on the news that the company delivered a strong first quarter on the topline, with gross bookings, all units sold metrics (room nights, airline tickets, rental car days), and revenue ahead of Consensus estimates. However, operating profit missed. Also Management noted April room night growth was up mid-teens, which implies meaningful deceleration. Overall it was a mixed quarter for the company.

Booking is up 51.9% since the beginning of the year. Investors who bought $1,000 worth of Booking's shares 5 years ago would now be looking at an investment worth $1,490.

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