Booking NASDAQ: BKNG Looks Like A Great Business Trading Cheap

Value Investing with Sven Carlin, Ph.D. • 1 day ago

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What This Video Is About

The video examines the investment potential of Booking, a company that has experienced a significant decline in its stock price despite its strong underlying business and attractive valuation. The speaker discusses the company's business overview, cash flows, market capitalization, and the potential impact of inflation and AI disruption on its stock price.

Major Ideas Discussed

  • Booking's stock has declined 24% since its August high due to slowing growth and AI fears, but its underlying business remains strong with a good yield and buybacks.
  • The company's revenue, net income, and diluted earnings per share have all increased over the trailing 12 months, representing double-digit growth at a P/E ratio of 18.
  • The company has a strong capital return and good cash flows, with a free cash flow yield of 8.3%.
  • Inflation can actually benefit Booking, as the platform fees increase with rising prices.
  • The potential disruption from AI is a risk, but it's not likely to be destructive, and the company's fees are lower than those of other operators.
  • The speaker concludes that the risk and reward is not attractive due to the potential disruption from AI.

What to Watch Next

Investors should monitor the potential disruption from AI, the company's ability to maintain its strong cash flows and market capitalization, and the impact of inflation on the company's platform fees.