Yahoo Movies What Should Investors Know About Booking Holdings Inc.'s (NASDAQ:BKNG) Future?
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Booking Holdings Inc.'s (NASDAQ:BKNG) latest earnings announcement in December 2018 confirmed that the company benefited from a large tailwind, leading to a high double-digit earnings growth of 71%. Investors may find it useful to understand how market analysts predict Booking Holdings's earnings growth outlook over the next couple of years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
View our latest analysis for Booking Holdings
Market analysts' consensus outlook for next year seems rather subdued, with earnings growing by a single digit 9.6%. The growth outlook in the following year seems much more buoyant with rates generating double digit 22% compared to today’s earnings, and finally hitting US$5.5b by 2022.
Although it is useful to be aware of the rate of growth each year relative to today’s value, it may be more valuable to analyze the rate at which the earnings are moving on average every year. The advantage of this technique is that it removes the impact of near term flucuations and accounts for the overarching direction of Booking Holdings's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 9.5%. This means that, we can presume Booking Holdings will grow its earnings by 9.5% every year for the next few years.
Next Steps:
For Booking Holdings, I've put together three important aspects you should further research:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is BKNG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether BKNG is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of BKNG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
