Pros and Cons of Investing in Booking Holdings

PHOTO CREDIT: Booking Holdings

OVERVIEW

PROS

  1. Booking Holdings is seeing a pent-up travel demand in the leisure sector. The company is seeing demand for leisure destinations surge as people go out for the first time in over a year. In fact, there are shortages of many travel products and services in some destinations. This will benefit the company’s recovery and will also benefit investors in the company.
  2. Domestic and international destinations have opened up earlier than expected for travelers. This will further help the company recover as they will see bookings to domestic destinations like Florida and California as well as international destinations like Europe and the Caribbean increase. This will benefit the company and its investors.

CONS

  1. The company faced negative impacts from the pandemic. The company saw a drop in demand for their services as people stayed indoors and as governments closed their borders and locked them down. This hurt the company’s financial results for the FY 2020 and has also hurt investors in the company.
  2. One aspect that is slowly recovering is business travel. Many companies that use Booking Holdings are not using the company’s services due to work from home and pandemic conditions around the world. This slow return in business travel will hurt the company and its investors.
  3. The company has an extremely expensive stock. At the moment, the company’s stock trades at over $2200 (which is 133 times earnings). This is an extremely expensive stock to own (especially because it is a travel booking company). I would wait for the stock price to fall a bit more and then look to invest in this otherwise great company.

MY OPINION

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.