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Will Agency Growth Aid Booking Holdings (BKNG) Q1 Earnings?
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Booking Holdings Inc. (BKNG - Free Report) is slated to report first-quarter 2018 earnings on May 9. In the last reported quarter, the online travel company delivered a positive earnings surprise of 19.41%.
The surprise history has been impressive in Booking Holdings’ case. The company surpassed estimates in each of the trailing four quarters, with an average four-quarter positive surprise of 10.05%.
We observe that shares of Booking Holdings have gained 15.4% in the past 12 months, underperforming the industry’s 48.5% rally.
Strong Agency Revenues to Drive International Results
Booking Holdings generates bulk of its revenues from international markets where the agency model is more popular. This is reflected in the merchant/agency split of revenues, which was 19/74% in the fourth quarter.
In the fourth quarter, agency revenues decreased 41.2% sequentially but increased 19.4% from the year-ago quarter. We expect agency revenues to increase in the to-be-reported quarter, driven by strength across all its platforms.
Agoda and Rental Cars to Boost Merchant Revenues
In the to-be-reported quarter, merchant revenues are also expected to grow, driven by strength across agoda.com and rentalcars.com. While agoda.com is likely to benefit from discounting in markets, rentalcars.com is expected to ride on continuous operational improvements.
In the fourth quarter, merchant revenues were down 25.7% sequentially but up 15.6% year over year.
Strong Room Night Growth
Also, room night growth is expected to improve in the quarter to be reported, driven by diverse inventory and brand recognition that tend to balance out macro uncertainties related to any one market, as well as growing competition from local and international players.
In the last reported quarter, room nights volume increased 16.8% on a year-over-year basis. Also, rental car days increased 5.4% and airline tickets were up 3.1% from the year-ago quarter.
For the soon-to-be-reported quarter, Booking Holdings expects room nights booked to grow 8-12% and total gross bookings to increase 14.5-18.5% year over year (6-10% on a constant currency basis). The company expects adjusted EBITDA in the range of $680-$705 million.
What Our Model Suggests
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Booking Holdings has a Zacks Rank #3 and an Earnings ESP of +1.22%. This combination indicate a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks you may also want to consider as our model shows that these too have the right combination of elements to deliver a positive earnings surprise:
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2.
Enanta Pharmaceuticals, Inc.(ENTA - Free Report) has an Earnings ESP of +75.76% and a Zacks Rank of 1.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Will Agency Growth Aid Booking Holdings (BKNG) Q1 Earnings?
Booking Holdings Inc. (BKNG - Free Report) is slated to report first-quarter 2018 earnings on May 9. In the last reported quarter, the online travel company delivered a positive earnings surprise of 19.41%.
The surprise history has been impressive in Booking Holdings’ case. The company surpassed estimates in each of the trailing four quarters, with an average four-quarter positive surprise of 10.05%.
We observe that shares of Booking Holdings have gained 15.4% in the past 12 months, underperforming the industry’s 48.5% rally.
Strong Agency Revenues to Drive International Results
Booking Holdings generates bulk of its revenues from international markets where the agency model is more popular. This is reflected in the merchant/agency split of revenues, which was 19/74% in the fourth quarter.
In the fourth quarter, agency revenues decreased 41.2% sequentially but increased 19.4% from the year-ago quarter. We expect agency revenues to increase in the to-be-reported quarter, driven by strength across all its platforms.
Agoda and Rental Cars to Boost Merchant Revenues
In the to-be-reported quarter, merchant revenues are also expected to grow, driven by strength across agoda.com and rentalcars.com. While agoda.com is likely to benefit from discounting in markets, rentalcars.com is expected to ride on continuous operational improvements.
In the fourth quarter, merchant revenues were down 25.7% sequentially but up 15.6% year over year.
Strong Room Night Growth
Also, room night growth is expected to improve in the quarter to be reported, driven by diverse inventory and brand recognition that tend to balance out macro uncertainties related to any one market, as well as growing competition from local and international players.
In the last reported quarter, room nights volume increased 16.8% on a year-over-year basis. Also, rental car days increased 5.4% and airline tickets were up 3.1% from the year-ago quarter.
For the soon-to-be-reported quarter, Booking Holdings expects room nights booked to grow 8-12% and total gross bookings to increase 14.5-18.5% year over year (6-10% on a constant currency basis). The company expects adjusted EBITDA in the range of $680-$705 million.
What Our Model Suggests
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.
Booking Holdings has a Zacks Rank #3 and an Earnings ESP of +1.22%. This combination indicate a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Booking Holdings Inc. Price and EPS Surprise
Booking Holdings Inc. Price and EPS Surprise | Booking Holdings Inc. Quote
Other Stocks to Consider
Here are some other stocks you may also want to consider as our model shows that these too have the right combination of elements to deliver a positive earnings surprise:
Solar Capital Ltd. (SLRC - Free Report) has an Earnings ESP of +4.55% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Etsy, Inc. (ETSY - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2.
Enanta Pharmaceuticals, Inc.(ENTA - Free Report) has an Earnings ESP of +75.76% and a Zacks Rank of 1.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>