Numbers

Claude View

The Numbers

Booking Holdings is a rare asset: a 35%+ operating-margin, ~$9B FCF compounder trading at ~29x forward earnings — right on top of its own 20-year P/E average and at an ~12% discount to GF Value ($218.09). The whole bear case sits in one line of the financials: FY25 net income fell 8% even as revenue grew 13%, because interest expense rose to $1.6B as management repeatedly tapped the bond market to fund a $6.4B buyback into a negative-equity balance sheet. The single number most likely to move this stock is operating-margin direction — not gross bookings growth, not room-nights — because margin is what the market is paying 29x for.

Snapshot

GF Score 93/100 sits in the 90th-percentile-plus of the GuruFocus universe — driven by a 10/10 growth rank and 9/10 profitability rank. The rub: predictability scores 1 out of 5 stars, reflecting how much COVID broke the longer-horizon smoothness of earnings. The market's discount to GF Value is real but modest; this is not a deep-value story.

A. Quality scorecard — is this business built to last?

The scorecard splits cleanly in two. Economically this is a top-tier business — Growth 10/10, Profitability 9/10, Z-score nearly 2x the safe threshold, M-score signalling clean earnings. Financially it looks fragile — a 5/10 balance-sheet rank and 1/5 predictability exist because Booking has bought back so much stock that shareholders' equity is now -$5.6B. The Z-score stays high because cash-generation and market cap overwhelm the engineered equity deficit, but any reader screening on book-value or leverage ratios will see numbers that look scary out of context.

B. Revenue & earnings power — 20 years

Revenue has grown 11.6% CAGR over the last decade despite a 55% COVID collapse in 2020. Operating margin rebuilt from 8.5% in 2020 back to 34.5% in FY25 — its highest reading in seven years — but net margin dropped to 20.1% from 24.8% in FY24. The gap is the one the bears point at: $322M more in interest expense year-over-year, plus a higher effective tax rate, pulled reported EPS down 4% on a 13% revenue tailwind.

Recent quarterly trajectory

Q3 is Booking's structural money quarter — summer European bookings settle then. Q3 2025 revenue of $9.0B was a record (+13% YoY) and net income of $2.75B was the largest quarterly print ever. Q4 came in soft, with EPS missing Street estimates ($49.24 expected vs ~$44 delivered on a pre-split basis).

C. Cash generation — are the earnings real?

D. Capital allocation — where the cash goes

Booking is now a capital-return machine — not a growth re-investor. Since 2016 it has spent $48.4B on buybacks while M&A has averaged under $200M/year. FY24 marked the initiation of a cash dividend ($1.17B) — an acknowledgement that the business now throws off more cash than share-reduction alone can absorb. The FY25 shareholder yield of 3.95% (3.77% buyback + 0.72% dividend, minus modest issuance) is attractive, but the funding mechanism is contentious: $3.7B of debt was issued in FY25 and another $5.0B repaid, with leverage held effectively flat.

E. Balance-sheet health — looks worse than it is

F. Valuation — now vs its own 20-year history

This is the single most important chart on the page. Booking's multiple history tells you what "fair" looks like for this specific business.

Stripping out 2020 (the COVID-denominator blowup), BKNG has averaged a 29–30x P/E over the last decade. At 32.3x it sits modestly above mean and below +1 standard deviation. On EV/EBITDA the current 18.8x is right on its 10-year mean of 18.1x. On FCF yield, 5.32% is also roughly in line with the 5-year average of 5.3%. This stock is priced at fair — not cheap, not expensive — against its own history. What's changed is the balance sheet supporting the multiple: net debt has swung from -$201M in 2021 to +$1.5B today, and equity has gone negative.

G. Peers — quality gap is real, valuation gap is thin

Competitor financial disclosures in our dataset run through FY2023; size/scale is current, multiples are GuruFocus where available.

Booking trades roughly in line with Airbnb's P/E while earning 2x the operating margin and generating 2x the free cash flow. The relevant gap is vs Expedia — BKNG prints 34% op margins to EXPE's 8%, yet trades at 32x vs 14x. That premium is well-earned: Booking's platform economics are fundamentally better.

H. Fair-value range

The spread from $145 (bear) to $280 (bull) around a central GF Value of $218 puts the stock roughly 13% below fair and 27% below the 12-month GF estimate. The gap to Street consensus ($233 target adjusted for split) is similar. None of this qualifies as deeply mispriced — this is a quality compounder sitting at a reasonable entry point, not a bargain.

Closing read

The numbers confirm that Booking is a top-decile platform business: 34% operating margins, $9B of free cash flow, 50%+ ROIC, and the cleanest earnings quality flag (Beneish -2.71) among major travel names. The numbers contradict the balance-sheet-looks-broken narrative — the -$5.6B equity is buyback arithmetic, not distress, and net leverage is 0.2x EBITDA. What to watch next is FY26 operating margin: management is paying ~$1.6B/yr in interest to fund the buyback, so any slowdown in room-night growth that drops margin below 32% would compress EPS faster than revenue, and the 29x multiple would not hold.