The Booking Holdings story

What drives the business

• Booking.com is the leading online accommodation reservation brand by room nights booked, offering approximately 4.4 million properties across over 220 countries and territories at December 31, 2025.
• Booking Holdings earns travel reservation commissions and payment fees through Booking.com, Priceline and Agoda, alongside KAYAK’s referral and advertising business and OpenTable’s restaurant services.
• Its Connected Trip strategy links accommodations, flights, attractions and payments with its Genius loyalty program and AI tools, with flight tickets growing 37% and attraction tickets growing about 80% off a small base in 2025.
• The business is shifting toward merchant transactions, where Booking facilitates traveler payments, with merchant revenue accounting for 70% of revenue in the quarter to June 2026 versus 35% in the quarter to September 2021.
• Over the last twelve months, revenue reached $28.2 billion and free cash flow reached $9.5 billion, while the Transformation Program is intended to create room for reinvestment through lower operating costs.

What the price assumes

At $163.87, the reverse DCF implies free cash flow after stock pay grows 0.8% a year for ten years, using a 10.2% discount rate.

Booking delivered 11.5% annual growth in that measure over the last 10 years, compared with the TenQ check’s 7.8% bar, which slows that record halfway toward 4%.

The implied growth rate is below both comparisons, although revenue growth over the last twelve months slowed to 12.9% from its three-year annual pace of 16.3%.

Value BKNG on your own assumptions

What could change the story

• Guidance assumes resilient travel demand despite elevated flight prices, reduced capacity on certain routes and softer long-haul international demand linked to the Middle East conflict.
• Competition includes large technology companies and AI travel assistants, while marketing expense rose to 4.7% of gross bookings in the quarter to June 2026 from 4.6% in the comparable prior period.
• The 118% increase in net income in the quarter to June 2026 contrasts with 8% adjusted net income growth, with foreign currency effects on debt among the items excluded from adjusted results.
• Total debt of $20.2 billion exceeds cash and short-term investments of $17.2 billion, and negative equity and a liquidity ratio of 1.09 against the TenQ check’s 1.50 bar limit balance sheet flexibility.
• Shareholder distributions exceeding free cash flow leave less internally generated cash for other uses, while liabilities reached 136.3% of assets versus 73.9% five years earlier.

What to watch next

• For the third quarter of 2026, Booking expects room night growth of 3% to 5% and gross bookings and revenue growth of 4% to 6%.
• For full year 2026, management expects high single-digit growth in reported gross bookings, revenue and adjusted EBITDA, with adjusted EPS growth in the low to mid-teens.
• Progress toward approximately $650 million in annual savings by the end of 2027 can be assessed alongside adjusted fixed operating expense growth, which was 6% in the quarter to June 2026.
• Direct bookings, which remained in the mid-fifties percentage range over the trailing four quarters to June 2026, and alternative accommodation room night growth, which was 4% in the quarter to June 2026, will help show whether loyalty and broader accommodation choice are gaining traction.

Sources

• Booking Holdings's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The BKNG stock report, for every figure and check