Long a favorite of MarketScreener, both for the characteristics of its business model and the quality of its management, Booking continues its impeccable growth trajectory. See Booking Holdings Inc.: Best of the best and Booking Holdings: A leading platform at a reasonable price.
This is once again evidenced by the results for H1 2025: room nights increased by 8%, the value of reservations by 13% and revenue by 16% compared to the same period last year. All this without any increase in marketing budgets.
The group's specialty, cost control, remains admirable, with cash profit—or free cash flow—jumping 32%. Based in Europe, Booking enjoys a significant advantage over its US counterparts in the technology sector, which are forced to bleed themselves dry with stock options.
Admittedly, there is also a downside. There is no doubt that the stock would command a much higher valuation multiple if Booking were based in the US and used more by the North American public.
The deterioration in the half-year results – with earnings per share down 38% compared with the first six months of last year – is due to an unfavorable currency impact that has increased the value of debt but has no impact on cash flows.
Like Moody's – see Moody's rewards its most patient shareholders – amongst other examples discussed recently, in the absence of other relevant uses, Booking is aggressively returning cash to its shareholders through share buybacks despite a valuation close to its highest multiples.
However, this remains within reasonable limits, especially if the group's business continues to expand. Booking is expected to generate at least €25bn in revenue this year, compared with €15bn in 2019, just before the pandemic.
In the meantime, free cash flow has doubled and the number of shares outstanding has fallen by a fifth. In this regard, as long as the momentum continues, any pullback is likely to be an opportunity worth exploring.
