Summer has officially begun, and with it comes high season for the tourism business: vacation bookings, plane trips, and hotel stays. The industry continues to resurge following the doldrums of COVID as consumers eagerly part with their hard-earned dollars to fill airports and embark on adventures or relax on the beach with their families. In fact, earlier this month the U.S. Travel Association found a 19% surge from last quarter in Americans planning to increase their spending on leisure travel in the next three months - amounting to one-quarter of those surveyed.
Booking Holdings and the rest of this week’s selections have all earned an InvestingPro financial health score of 2.75 or more out of 5, which for the last 7 years has indicated outperformance vs. the S&P 500 . That score indicates firm financials: top-notch earnings, cash flow, and growth vs. peers.
When it comes to tourism names, Booking Holdings is at the center of it all, running popular trip-booking sites like Booking.com, Kayak, Priceline, and Cheapflights. The company has earned a glittering InvestingPro health rating of 3.33 thanks to its explosive profitability and high returns to investors.
Per the extensive metrics available on InvestingPro, Booking performs better than virtually all its peers on profit margins, return on common equity, and earnings-per-share growth. It is also solidly positioned on cash flow: It holds more cash than debt on its balance sheet, and free cash flow nicely outpaces net income. And it puts that cash to work for shareholders, having authorized a brand-new $20 billion share repurchase earlier this year after finishing up its previous $15B buyback.
Research firm Wedbush, for one, calls the company one of its top ideas due to Booking’s “leading competitive position” as well as its committed share buybacks, its strong free cash flow and its “best-in-class” margins. And InvestingPro’s fair value calculations say the share price is right: Further upside is estimated at 23% above current levels, even after a 30% run since the start of the year.
Want to see the full list of this month's Pro Picks poised to beat the market? Start here to unlock must-have insights and data. And while you’re here, dig into InvestingPro’s wealth of tools and screeners to begin building a lucrative portfolio.
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Data as of June 22, 2023.
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