Booking Holdings Sees Gross Bookings Plunge 91%; Analyst Still Says Buy

Shares in Booking Holdings (BKNG) rose 4% in Thursday’s after-hours trading after the travel giant posted second quarter earning results that beat the Street’s extremely low expectations. Shares in BKNG are currently trading down 11% year-to-date.

Specifically Q2 Non-GAAP EPS of -$10.81 beat Street forecasts by $0.77 while GAAP EPS of $2.97 also beat by $16.88. Meanwhile revenue of $630M topped Street estimates by $55.14M- despite plunging 83.4% Adjusted EBITDA came in at -$376M which was better than the -$458M consensus.

Gross bookings of $2.31B fell short of the consensus expectations of $3.37B- and represented a massive 91% decrease year-over-year. Room nights sold dropped 86.7%, and rental car days were almost completely demolished with a 90.4% decrease. Similarly, on a unit basis, airline tickets fell 69.7%.

BKNG CEO Glenn D. Fogel commented: “We faced a challenging second quarter and continue to face challenges due to the impact of the COVID-19 pandemic on travel demand. However, we have witnessed improvement in booking trends since April, which is encouraging.”

He continued: “Looking forward, we continue to execute on our operating plans to navigate the company through these challenging times and enable us to emerge from this crisis in a position of strength.”

Following the earnings report RBC Capital’s Mark Mahaney reiterated his BKNG buy rating while ramping up the price target from $2,025 to $2,050 (17% upside potential). According to Mahaney “All in, Fundamental Trends were very negative, but we believe the worst is over for BKNG.”

For instance, New Room Nights exited Q2 down 50% Y/Y, up from the -85% trough in April and improved to -35% in July. “Just like Expedia (EXPE), BKNG’s Q2 results reflected the ugly truth of travel today. Unlike EXPE, BKNG was able to point to notable improvement in July, though we remain cautious on the near-term sustainability of this” the analyst commented. (See BKNG stock analysis on TipRanks).

Overall the stock has a cautiously optimistic Moderate Buy Street consensus with an average analyst price target of $1,749 which is in-line with the current share price.

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