Here's Why We Think Booking Holdings (NASDAQ:BKNG) Is Well Worth Watching

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Booking Holdings (NASDAQ:BKNG). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Booking Holdings with the means to add long-term value to shareholders.

View our latest analysis for Booking Holdings

How Fast Is Booking Holdings Growing Its Earnings Per Share?

Booking Holdings has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. Booking Holdings' EPS skyrocketed from US$76.70 to US$126, in just one year; a result that's bound to bring a smile to shareholders. That's a impressive gain of 64%.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. EBIT margins for Booking Holdings remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 25% to US$21b. That's a real positive.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Booking Holdings' future profits.

Are Booking Holdings Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$119b company like Booking Holdings. But we do take comfort from the fact that they are investors in the company. We note that their impressive stake in the company is worth US$263m. We note that this amounts to 0.2% of the company, which may be small owing to the sheer size of Booking Holdings but it's still worth mentioning. This still shows shareholders there is a degree of alignment between management and themselves.

Does Booking Holdings Deserve A Spot On Your Watchlist?

You can't deny that Booking Holdings has grown its earnings per share at a very impressive rate. That's attractive. With EPS growth rates like that, it's hardly surprising to see company higher-ups place confidence in the company through continuing to hold a significant investment. On the balance of its merits, solid EPS growth and company insiders who are aligned with the shareholders would indicate a business that is worthy of further research. We don't want to rain on the parade too much, but we did also find 2 warning signs for Booking Holdings that you need to be mindful of.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in the US with promising growth potential and insider confidence.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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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.