Booking Holdings is the IBD Stock of the Day for Wednesday. Shares of the online travel agency are hovering near a 5,250 handle buy point.
Booking Holdings is the parent company of Booking.com, Priceline and OpenTable, among other brands. On the stock market today, shares of the online travel company fell a fraction to close at 5,216.55.
Booking stock is ahead 40% from 12 months ago and has gained slightly more than 5.5% year-to-date.
That includes a 7% gain since Booking Holdings reported a first quarter earnings beat late last month, despite concerns about tariffs and broader economic uncertainty weighing on travel demand.
Booking's first-quarter earnings increased 22% year-over-year to $24.81 per share while sales increased 8% to $4.8 billion. Both results beat analyst expectations. Booking stock was negative in after-hours trading following the April 29 report but recovered to a 4% gain in regular trading the next day.
One advantage for Booking Holdings is that it derives the majority of its revenue from Europe. U.S.-focused online travel companies Expedia Group and Airbnb called out weakness in American travel demand during their respective first quarter reports in recent weeks.
On a conference call with analysts following the company's Q1 report, Booking CFO Ewout Steenbergen said the company expects revenue growth of 10% to 12%. Analysts were projecting sales would grow 8%, to $6.3 billion, prior to the report.
He noted that Europeans and Canadians were traveling less to the U.S. but said the company is seeing "stable demand" overall.
"So from January until today in April, we have seen very stable demand and don't see any impact from the general economic environment in our business," Steenbergen said. "So that's really a positive."
Booking Stock Boasts 94 Composite Rating
Evercore ISI Mark Mahaney reiterated an outperform call for Booking stock following the Q1 report, saying it remains "the highest quality online travel stock."
"Largest scale … Fastest growth … Very High Margin," Mahaney added. "Super experienced management team. And we view BKNG as reasonably priced, with reasonably sustainable low to midteens EPS growth, substantial FCF (free-cash-flow) generation, and a clear track record of execution in all different market environments."
Meanwhile, Booking stock has an IBD Composite Rating of 94 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
The score makes Booking Holdings the top rated stock in the Leisure-Travel Booking group tracked by IBD. India-focused MakeMyTrip is second, followed by Expedia.
Further, Booking's IBD Relative Strength Rating is a strong 91 out of 99.
Booking stock was recently added to IBD's SwingTrader.
