Summary

  • BKNG has so far lagged behind its online travel peers this year despite several strengths we see potentially leading to price appreciation as travel recovers.
  • BKNG has a much more significant portion of International revenue, with as much as 90% of revenue coming from outside the US. This will prove an asset as 2021 progresses.
  • The company has maintained costs and operated extra lean to get through the pandemic but should return higher growth as travel occupies a disproportionately large consumer wallet share.
  • The green shoots are sprouting in BKNG's case, and the company's steady and forward-looking pandemic management has put it in an excellent position to capture pent-up demand.
  • The leading criticism of the stock is its high share price and valuation. If it was based in Silicon Valley instead of Connecticut, we think these concerns would be diminished.

Everyone in America loves a David and Goliath story. Perhaps it is a cultural feature of a nation whose birth involved a nearly hopeless military struggle against the world's leading power, The British Empire. Nonetheless, this cultural quirk of ours could often do well to be left out of our stock-picking process. We love a good David story and have focused on some stocks unfairly possessing scarlet letters in...
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