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What's in Store for Booking Holdings' (BKNG) Q2 Earnings?

Zacks Equity Research

Booking Holdings Inc. BKNG is slated to report second-quarter 2019 earnings on Aug 7, after the closing bell.

Notably, its surprise history has been impressive. The company surpassed estimates in three of the trailing four quarters, with average positive surprise of 8.04%. The online travel company delivered a negative earnings surprise of 0.80% in the last reported quarter.

Strong Agency Revenues to Drive International Results

Booking Holdings generates bulk of revenues from international markets, wherein the agency model is more popular. This is reflected in the merchant/agency split of revenues, which was 21.3/68.7% in the second quarter.

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We expect agency revenues to increase in the to-be-reported quarter as well, driven by strength across all its platforms.

Booking Holdings Inc. Price and EPS Surprise

 

Booking Holdings Inc. Price and EPS Surprise
Booking Holdings Inc. Price and EPS Surprise

Booking Holdings Inc. price-eps-surprise | Booking Holdings Inc. Quote

Agoda and Rental Cars to Boost Merchant Revenues

Merchant revenues are also expected to grow in the to-be-reported quarter, driven by strength across agoda.com and rentalcars.com. While agoda.com is likely to benefit from discounting in the markets served by the company, rentalcars.com is expected to ride on continuous operational improvements.

Strong Room Night Growth

Room night growth is expected to improve in the quarter to be reported, driven by diverse inventory and brand recognition that tend to balance out the macro uncertainties related to any market, and growing competition from local and international players.

Strong performance of its direct channel is expected to drive total room nights booked in the to-be-reported quarter.

For the soon-to-be-reported quarter, Booking Holdings expects room nights booked to grow 6-8% from a year ago. Further, total gross bookings are anticipated to grow 4-6% year over year on a constant-currency basis.

What Our Model Suggests

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Currently, Booking Holdings has a Zacks Rank #1 and an Earnings ESP of +3.77%, which is indicative of a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some other stocks that you may want to consider, as our model shows that these too have the right combination of elements to deliver a positive earnings surprise in the upcoming releases:

SeaWorld Entertainment SEAS has an Earnings ESP of +11.01% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cisco Systems, Inc. CSCO has an Earnings ESP of +1.53% and a Zacks Rank #2.

Ciena CIEN has an Earnings ESP of +5.26% and a Zacks Rank #2.

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