Booking Holdings: Hotel Fragmentation Moat

Ricardo Fernandez3.38K FollowersFollow5ShareSavePlay(8min)Comment(1)SummaryBooking Holdings remains a compelling buy due to its dominant merchant model in a highly fragmented global hotel sector.BKNG's merchant revenue is projected to reach 70% of total revenue by 2028, underpinning sustained earnings and free cash flow growth.Despite AI disruption fears, consensus forecasts solid 19% annual earnings growth and over $10bn in free cash flow, supporting robust buybacks and dividends.Valuation has become attractive at 1x PEG and 19x P/CE, with downside risk mitigated by sector fragmentation and slow AI adoption. benedek/iStock Unreleased via Getty Images Introduction I am an avid traveler, and in a span of two weeks, I may visit seven cities, and for this, I have used Booking (BKNG) over Expedia (EXPE) due to greater international selection and farThis article was written byRicardo Fernandez3.38K FollowersFollowI have more that 35 years of experience in the investment field having worked as a sell & buy side analyst and portfolio manger for debt and equity funds. I am currently managing a high yield Latam bond fund.My goal, as a Seeking Alpha contributor, is to provide a fundamental view and analysis of companies and funds in a streamlined version of institutional research. The operating and financial forecast, whether my own or based on consensus, drives the valuation and ultimate rating. I like numbers (financial statements) and use words to explain there meaning and potential consequences.For the most part, my selection choices reflect what I believe can offer long term potential and I frequently take positions in many ideas for my personal account.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in BKNG over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.