There is no question that Elon Musk is a strange dude, marching to the beat of his drum, but his latest gaffe suggests that the world's wealthiest person needs a seriously long holiday.
The Twitter owner got into a tweet exchange with one of his employees. You’ve probably already heard the story, so I’ll be brief.
Haraldur “Halli” Thorleifsson went directly to Musk to determine if the company still employed him.
“9 days ago the access to my work computer was cut, along with about 200 other Twitter employees. However your head of HR is not able to confirm if I am an employee or not. You’ve not answered my emails. Maybe if enough people retweet you’ll answer me here?” MarketWatch reported Thorleifsson’s original tweet.
Thorleifsson suffers from Dysferlinopathy, a genetic disorder that causes muscular atrophy. Musk went on to ridicule the man -- who just happened to have sold his Icelandic creative agency to Twitter in 2021 for a considerable sum -- without fully understanding his situation.
He apologized, but the damage was already done.
I did a Barchart.com stock screen this morning that found Booking Holdings (BKNG) and 18 other price volume leaders listed on Nasdaq or NYSE are trading within 10% of their 52-week high.
Mr. Musk might want to find some holiday ideas through Booking.com, Priceline, or one of the company’s other online travel sites. And while he’s at it, he might consider buying some BKNG stock. It can’t be any worse than his ill-advised purchase of Twitter.
Why Is BKNG Nearing a 52-Week High?
Booking Holdings reported its Q4 2022 results on Feb. 23. They were better than expected.
The company earned $24.74 a share in the fourth quarter, 56% higher than a year earlier and $3.77 above the consensus estimate. On the top line, its revenues were $4.05 billion, $150 million higher than analyst expectations, and 36% above Q4 2021.
What's not to like?
For 2022, it generated $3.1 billion in net income from $121.3 billion in gross travel bookings. Gross travel bookings and net income jumped 58% and 162%, respectively, over 2021. As a result, its results in 2022 were better than those in 2019, before the pandemic.
“For the first time, we saw room nights across four of our major regions above 2019 levels for the quarter, which was another important milestone for our recovery,” CEO Glenn Fogel stated in its Q4 2022 conference call. “Room night growth trends have further strengthened in 2023, with January room nights up 26% compared to 2019 or up about 60% year over year.”
Recession worries aside, people are traveling, and Booking Holdings shareholders are directly benefiting.
Does BKNG Have Any More Room to Run?
Unless a global recession is deeper than predicted, I don't see travel slowing down too much through the remainder of 2023. Plenty of people have done minimal traveling over the past three years. At some point, they will look to go somewhere.
According to Barchart.com data, 21 analysts cover BKNG, giving it a Moderate Buy (4.33 out of 5) and a mean target price of $2,718.95, 6% higher than where it’s currently trading. Up 34% over the past six months -- and within 2% of its all-time high of $2,630, it’s easy to see why analysts might be hesitant to raise their estimates.
That will turn out to be a mistake. Booking shares could just be getting started.
Skift discussed some of the company’s successes after the company released its earnings. Specifically, it mentioned how the company took market share in the U.S., making good on one of its stated goals from the past year.
“Fogel said Booking gained market share in the U.S., and outpaced the broader accommodations market there. He said the U.S. gains came from brand marketing, adding flights to Booking.com, increasing adoption of the company’s payments platform, and working with ‘partners to ensure we are delivering incremental value to them,’” Skift contributing writer Dennis Schaal wrote on Feb. 23.
Schaal also reiterated that its CEO is excited by artificial intelligence and what it can do from a service perspective for its travel suppliers and end-user travelers.
In addition, the company sold its stake in Meitaun, the Chinese shopping platform, for $1.2 billion in February, generating a 250% gain on its original investment.
The Bottom Line
The analyst earnings estimates for 2023 and 2024 are $125.85 and $152.97, respectively. It trades at 20.5x 2023 earnings and 16.8x 2024. That’s considerably less than its five-year average multiple of 33.8x earnings.
If Elon wants to make money on an investment other than Tesla (TSLA), he could do much worse than throwing a few billion dollars into the online travel company.
It’s a comer.
More Stock Market News from Barchart
- LVMH: Anatomy Of A $438 Billion Empire
- Unusual Put Option Activity with Signature Bank Stock Provides Huge Income
- Analyzing Fed policies on Unemployment, GDP, and Interest Rates
- Investors Search for Value as Mega-cap Tech Stocks Get Pricey
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
/Pfizer%20Inc_%20logo%20sign-by%20JHVEPhoto%20via%20iStock.jpg)
/Netflix%20on%20tv%20with%20remote%20by%20freestocks%20via%20Unsplash.jpg)
