Booking Holdings: Seriously?

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Right, so everyone’s getting all worked up about stock splits. Like it changes anything fundamental. Honestly, it’s a bit like rearranging the deck chairs on the Titanic, isn’t it? But – and this is the bit that makes me actually pay attention – it can signal confidence. And when management is confident, well, let’s just say I’m more inclined to listen. Because, frankly, they usually know what they’re doing. Usually.

The numbers don’t lie. Since 2010, stocks have tended to do rather well – averaging an 18.3% return in the 12 months after a split, compared to the S&P 500’s rather pedestrian 13.3%. Which is…interesting. But here’s the kicker: Booking Holdings (BKNG 0.72%) just announced a 25-for-1 split, and the stock’s down 5% since. Five percent! It’s practically begging for someone to take a look. And, naturally, I obliged. Don’t judge me.

Is Artificial Intelligence a Friend or Foe?

Everyone’s obsessed with AI now, aren’t they? Chatbots planning your holidays. It’s all very…efficient. A little terrifying, if you ask me. The fear is that AI will disrupt Booking’s core business – flights, hotels, the whole shebang. And, okay, maybe it will. But here’s the thing: Booking has a network. A massive network. 4.4 million properties in 220 countries. Try building that overnight. It’s not just about algorithms; it’s about relationships. Boutique hotels aren’t exactly lining up to hand their business over to some Silicon Valley startup.

And it’s not just hotels. They’ve got flights, rental cars, tours, OpenTable… It’s all part of their ‘Connected Trip’ strategy, which sounds terribly corporate, but basically means they want to handle your entire holiday. And it’s working. Transactions where people book multiple things through Booking increased by a rather impressive 20-something percent last year. Loyalty, people. It’s a powerful thing. They’re not just selling rooms; they’re building habits. And that, my friends, is hard to disrupt.

They’ve also got decades of data. Decades! Think about all the information they’ve collected on what people want, what they spend, where they go. That’s gold dust in the age of AI. They can use that data to create a truly personalized experience. Which, let’s be honest, is what everyone wants. They’re still early in the game, but they’re laying the groundwork. And, frankly, I’m rooting for them. Because a bit of healthy competition never hurt anyone. Except maybe the competition.

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The Stock is an Absolute Bargain Right Now

So, while everyone else is panicking about AI, Booking is actually delivering some seriously good results. Revenue up 13% last year, room nights up 8%. And they’re cutting costs. Apparently, they had some sort of austerity drive in late 2024. Which is…sensible, I suppose. It’s driving up profits, which is always nice. They’re also buying back shares, which is a bit like giving themselves a pat on the back, but it also boosts earnings per share. It’s a win-win, really. For them, at least.

They expect these cost savings to continue, and they’re planning to reinvest them into things like AI, ‘Connected Trips’, and expanding OpenTable internationally. Ambitious, but I like it. They’re also predicting their EBITDA margin will expand by around 50 basis points. Which, okay, it’s not exactly earth-shattering, but it’s a step in the right direction. They’re expecting 15% earnings per share growth. Which is…pretty good. Honestly.

That puts the forward P/E ratio at around 14. Which, let’s be blunt, is ridiculously cheap. Investors seem to be expecting a complete collapse in earnings. Which, frankly, is a bit dramatic. Even if competitors roll out fancy new AI-powered travel tools, Booking’s network, data, and brand should protect it. They’re maintaining their long-term outlook of 15% earnings per share growth. And with a PEG ratio of less than 1, right now is a seriously good time to buy. Don’t tell everyone, though. I want to get in before the price goes up. It’s called self-preservation, darling.

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2026-02-27 20:23