Core Insights - Booking Holdings (BKNG) is increasingly relying on the merchant model, enhancing payment revenues and customer experience control, which is vital for its growth strategy [1][2] Group 1: Merchant Model and Growth - The merchant model is central to BKNG's growth, allowing for higher value capture per transaction and better integration across travel services, which supports cross-selling and improves customer lifetime value [2] - Merchant revenues increased by 27.4% year-over-year to $4.25 billion in Q4, with merchant gross bookings rising 27.2%, now representing 72% of total gross bookings, up from 65% a year ago [3] - The company is expanding its payment infrastructure to over 100 payment methods and 50 currencies, enhancing its fintech capabilities and extending the merchant model across various travel verticals [3] Group 2: Financial Performance and Estimates - The Zacks Consensus Estimate for BKNG's Q1 2026 merchant revenues is $3.5 billion, indicating a year-over-year growth of 19.81% [4][8] - The Zacks Consensus Estimate for BKNG's Q1 2026 EPS is $29.5, reflecting a decrease of 5.24% over the past month but an 18.9% year-over-year growth [11] Group 3: Competitive Landscape - BKNG's merchant model positions it competitively against Expedia Group and Airbnb, with a focus on deepening traveler retention and enhancing direct booking rates [5] - Expedia Group emphasizes loyalty-led monetization through its One Key program, while Airbnb leverages its unique accommodations marketplace to maintain pricing power [5] Group 4: Stock Performance and Valuation - BKNG shares have declined by 18.4% over the past six months, compared to a 5.6% decline in the broader Zacks Retail-Wholesale sector and a 14.4% decline in the Zacks Internet-Commerce sub-industry [6] - BKNG trades at a forward 12-month price-to-sales multiple of 4.66X, significantly higher than the sector's 1.56X and the sub-industry's 1.9X [9]