Booking Holdings (BKNG) currently trades at a significant discount to the industry average. The stock now trades at a PE multiple of 22.16x, which is significantly lower than the industry average of 46.29x.
Booking Holdings also trades at a lower multiple compared to its peers in the online travel booking space. Major competitors Expedia (EXPE), TripAdvisor (TRIP), and Ctrip.com International (CTRP) have PE multiples of 47.86x, 68.42x, and 151.80x, respectively.
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Based on Wall Street’s earnings projection for the next 12 months, Booking Holdings is trading at a discount to the industry average as well as its competitors. Booking Holdings, Expedia, Trip Advisor, and Ctrip have forward PE multiples of 18.07x, 18.42x, 28.54x, and 33.78x, respectively. The industry average PE multiple currently stands at 16.87x.
Booking Holdings has an EV-to-EBITDA multiple of 14.30x. The EV-to-EBITDA valuation multiple of Booking Holdings is much lower than the multiple of peers TripAdvisor and Ctrip, which have EV-to-EBITDA ratios of 23.57x and 64.65x, respectively. However, the stock’s EV-to-EBITDA multiple is higher than that of Expedia’s 12.18x.
Similarly, based on analysts’ EBITDA forecast for the next 12 months, Booking is trading at a hefty discount to Expedia while at a premium to TripAdvisor and Ctrip. Booking, Trip Advisor, Ctrip, and Expedia have forward EV-to-EBITDA multiples of 13.27x, 14.24x, 22.15x, and 9.28x, respectively.
To gain exposure to Booking Holdings, investors can also invest in the Consumer Discretionary Select Sector SPDR Fund (XLY), which allocates ~3.6% of its corpus in the stock.