Earnings Beat: Booking Holdings Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a sad week for Booking Holdings Inc. (NASDAQ:BKNG), who've watched their investment drop 10% to US$3,328 in the week since the company reported its second-quarter result. It looks like a credible result overall - although revenues of US$5.9b were in line with what the analysts predicted, Booking Holdings surprised by delivering a statutory profit of US$44.38 per share, a notable 17% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Booking Holdings

Following the latest results, Booking Holdings' 32 analysts are now forecasting revenues of US$23.0b in 2024. This would be a reasonable 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 19% to US$178. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$23.2b and earnings per share (EPS) of US$176 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$4,101. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Booking Holdings at US$4,650 per share, while the most bearish prices it at US$3,480. This is a very narrow spread of estimates, implying either that Booking Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Booking Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.6% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Booking Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Booking Holdings' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$4,101, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Booking Holdings analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Booking Holdings you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com