Is Booking Holdings Inc (BKNG) overvalued?
On Equity Rank's model estimate, BKNG trades close to its fair value (4% below it). Booking Holdings Inc (BKNG) last closed at $160.67; the multi-method model fair value is $167.94.
| Price | Model fair value | Price vs model |
|---|---|---|
| $160.67 | $167.94 | 4% below |
What the answer rests on
- 5 of 8 valuation methods put BKNG's value above its price and 3 put it below, so the methods disagree.
- To justify today's price, BKNG's free cash flow would need to grow about 2.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 13.7% a year.
- BKNG trades at 18.9 times its last year's earnings, against a median of 19.4 for 72 profitable Consumer Discretionary companies.
- Over the past year the price sat below the model fair value on 23% of trading days. The gap ranged from 7% below to 21% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind BKNG's fair value · What prices assume · Other companies