If You Invested $1000 in Booking Holdings a Decade Ago, This is How Much It'd Be Worth Now

For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Booking Holdings (BKNG) ten years ago? It may not have been easy to hold on to BKNG for all that time, but if you did, how much would your investment be worth today?

Booking Holdings' Business In-Depth

With that in mind, let's take a look at Booking Holdings' main business drivers.

Norwalk, CT-based Booking Holdings Inc. is one of the largest online travel companies in the world. The company’s travel-related offerings cover hotel rooms, airline tickets, rental cars, vacation packages, cruises, “things to do” at customer destinations and travel insurance.

It has agreements with hotels, airline companies, cruise ships, transport companies and vacation providers, which enable it to accept bookings on their behalf. Information on these offerings and customer reviews are available on the company’s owned or operated websites, thus helping customers make informed decisions.

Services in the United States are provided through the Booking Holdings.com website. The company employs two marketing strategies in the country, “price-disclosed” and “name your own price” or “opaque”.

International results are comprised of revenues from rentalcars.com, Agoda and Kayak. While rentalcars.com allows it to take rental car reservations, Kayak enables comparative shopping of Booking Holdings inventories. Agoda, on the other hand, caters primarily to consumers in the Asian-Pacific region, offering flight, ground transportation, and activity reservation services. The acquisition of OpenTable, which has allowed it to expand into the restaurant reservations space, also contributes to the international revenues.

Booking Holdings reported revenues of $21.4 billion in 2023. Agency revenues accounted for 51% of revenues. Merchant revenues contributed 44% of revenues. It also generated 5% of 2023 revenues through advertisements on its websites, classified as the Advertising & Other category.

The agency model is more lucrative for the company. It generates revenues from travel-related transactions, which include travel reservation commissions, GDS reservation booking fees and certain travel insurance fees.

Merchant model revenues are also derived from travel-related transactions, which include ancillary fees, credit card processing rebates, and customer processing fees, along with the ones included in the agency model.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Booking Holdings a decade ago, you're probably feeling pretty good about your investment today.

A $1000 investment made in May 2014 would be worth $3,261.06, or a 226.11% gain, as of May 20, 2024, according to our calculations. Investors should note that this return excludes dividends but includes price increases.

The S&P 500 rose 182.41% and the price of gold increased 79.53% over the same time frame in comparison.

Looking ahead, analysts are expecting more upside for BKNG.

Booking Holdings reported impressive first-quarter 2024 results, wherein both earnings and revenues grew on a year-over-year basis. Revenue growth was driven by growing leisure travel demand. Substantial improvement in its booking trends was a major tailwind. Strong momentum across its merchant and advertising, and other businesses contributed well to top-line growth. The growing alternative accommodation business was a tailwind for the company. Solid growth in rental car and airline ticket units was a positive. The uptick in booked room nights is constantly contributing well to the gross bookings growth. However, the declining trend in agency bookings is a headwind. Also, geopolitical tensions in the Middle East region remained concerning for the company. The stock has underperformed the industry it belongs to on a year-to-date basis.

The stock is up 8.60% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 11 higher, for fiscal 2024. The consensus estimate has moved up as well.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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