2 Reasons to Watch BKNG and 1 to Stay Cautious

Core Viewpoint - Booking Holdings (NASDAQ: BKNG) has underperformed the market recently, trading at $4,940 per share with a 4.9% loss over the past six months, compared to the S&P 500's 19.5% gain [1][9] Group 1: Company Performance - Booking has demonstrated strong long-term revenue growth, achieving a compounded annual growth rate of 17.6% over the last three years, surpassing the average growth of consumer internet companies [3] - The company has an excellent free cash flow margin, averaging 34.3% over the last two years, indicating strong cash profitability and the ability to reinvest and return capital to investors [5][4] Group 2: Customer Metrics - Average revenue per booking (ARPB) growth has been modest at 3.8% over the last two years, which raises concerns about the company's ability to monetize effectively [6][7] - The increase in room nights booked is a more relevant metric for assessing long-term business potential, and the company will need to monitor ARPB growth closely [7] Group 3: Investment Considerations - Despite recent underperformance, Booking's stock trades at a forward EV/EBITDA of 14.8, suggesting potential value for investors [9]