Booking Holdings reported strong third-quarter results, with adjusted earnings per share rising 17% to $4.66, surpassing Wall Street's expectations. The company experienced a 10% increase in gross bookings, totaling $54.5 billion, and a 7% growth in room nights.
However, revenue declined by 1% to $8.9 billion due to a $900 million reduction linked to a Federal Trade Commission issue with Priceline. Notably, CEO Glenn Fogel emphasized the positive impact of AI on the business, with early indicators showing that users of AI tools on Priceline and Agoda are converting at double the rate of non-users and generating higher average booking values.
Booking is also integrating with third-party AI platforms, which could enhance its distribution channels. Despite risks such as geopolitical disruptions and unresolved FTC complaints, the company's core business remains robust, and the potential for AI to drive future growth is becoming clearer.
This reinforces the argument that Booking's stock may be undervalued as investors have been overly concerned about AI disruption while overlooking the company's competitive strengths