QS Research · Michael Burry's Scion Capital analyst template · 2006
Booking Holdings Inc. (BKNG)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case 0% · downside -31% · upside +27%
The de-rating is mostly headline and timing: Q3 2026 GAAP revenue fell 1.3% only after a $900M FTC-related reduction, while adjusted EPS still rose 17% and the TTM business earns $9.81B EBITDA on $28.13B revenue. But the price is not yet a deep-value long: at 12.7x EV/EBITDA and $4.25B net debt, the base value is roughly today’s $162 (12.7x x $9.81B = $124.59B EV; less $4.25B = $120.34B equity; / 743.70M = about $161.81), so base case is ~0%. EXPE’s 8.9x EBITDA gives about $111.69/share (-31%), and 16.0x gives about $205.34/share (+27%), so the long rule fails on downside and the short rule fails on upside. The market may be over-punishing a temporary FTC/guide reset, but low barriers, AI disintermediation, regulation and buybacks above FCF mean the margin of safety is not yet there.
Key numbers
- Share price: $162.17
- Market cap: $120.61B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $28.13B
- EV / EBITDA (TTM): 12.7x
- P/E (TTM): 16.8x
The 15 boxes
- ✓ 1. Long-form business notes
Booking Holdings is an online travel reservation platform that earns merchant revenue (facilitating traveler payment at booking), agency revenue (commission invoiced to the hotel after travel), and advertising/other revenue from KAYAK and OpenTable; FY2025 revenue was $26.9 billion, up from $6.8 billion in FY2020, with operating income of $8.82 billion. The business is now run through five brands (Booking.com, Priceline, Agoda, KAYAK, OpenTable) versus six in the FY2020 report, anchored by Booking.com's ~4.4 million properties at 12/31/2025, and it is expanding flights, attractions and payments under the 'Connected Trip' banner. Cash generation is large and low-capex — FY2025 operating cash flow $9.41 billion against $322.0 million of capex — funding $6.44 billion of buybacks and leaving equity at negative $5.58 billion.
- ✓ 2. Competitive advantage
The numbers describe a high-margin, asset-light, scale-driven franchise: FY2025 revenue $26.92B with operating income of $8.82B and operating cash flow of $9.41B against only $322M of capex, and operating income rising every year from $2.50B in FY2021. But the 10-K argues the moat is thinner than the margin suggests: "Barriers to entry are low", traffic depends on Google and other third-party platforms, and Gen AI-native competitors and suppliers going direct threaten disintermediation. Regulation is actively stripping away some of its tools (parity provisions, ranking criteria) — Spain fined it and a $485M liability sat on the December 31, 2025 balance sheet — so the advantage looks more like scale and brand economics than a protected network.
- ✓ 3. 10-Q takeaways
Q3 2026 volume grew: room nights +6.7% to 345M and gross bookings +9.6% to $54.5B, with constant-currency ADRs about +3%, but reported revenue fell 1.3% to $8.9B because of the $900M FTC matter. Merchant mix rose to 75% and marketing, G&A, and IT expense ratios increased; personnel was flat. Cash was $16.2B at September 30, 2026, with $12.4B buyback authorization and a $0.42 dividend declared in November 2026. Outlook centers on about $650M Transformation run-rate savings by 2027 and margin risk from SEO decline, Connected Trip, and merchant/alternative-accommodation mix.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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