KEY POINTS
- Tracker is Flagging a Recovery: Our tracker is mostly for directional purposes (accel vs. decel) since there is greater volatility in its growth rates vs. PCLN's room nights (compare axes in chart below). It's pointing to accelerating room-night (RN) growth for 2Q18, and a subtle deceleration 3Q TD, yet still higher than the 1Q18 read. But note that the 3Q read is relatively inconclusive since its registering the smallest absolute rate of change that we've seen in the time series.
- Thoughts into 2Q18: Historically, BKNG trades on its room-nights (RN) guidance vs. consensus estimates, and our tracker isn't giving us a clear read there. But we suspect it won't matter as much if BKNG produces accelerating 2Q18 RN growth, which we suspect would allay lingering concerns around the structural headwinds in the space and improve sentiment in the name. We saw something comparable off the 4Q17 print.
- Long Thesis Rehash: BKNG is our preferred player in the OTA space given its more streamlined operation and considerable scale, which collectively serves as a material competitive advantage within what is otherwise a largely commoditized space. BKNG's rough 2017 led to the narrative of "structural headwinds" in the OTA space, which we addressed at length in the decks/replays below. But 2017 was just a function of discrete events that inflated BKNG's prior-year comps, which consensus failed to factor into their estimates. BKNG has a much cleaner setup this year, and RN growth should reaccelerate at some point in 2018, if not 2Q18 as our tracker suggests.
BKNG DECKS & REPLAYS
- INTERNET | BEST IDEAS MID-YEAR UPDATE | 6/28/2018 | CLICK HERE
- BKNG | BEST IDEA LONG | 4/30/2018 | CLICK HERE
- OTAs | LONG-TERM OUTLOOK | 12/7/17 | CLICK HERE
2018 BEST IDEA DECKS & REPLAYS
- MTCH | BEST IDEA LONG | 6/11/2018 | CLICK HERE
- SPOT | BULL VS. BEAR | 3/28/2018 | CLICK HERE
- YELP | BEST IDEA SHORT | 2/5/2018 | CLICK HERE
- TWTR | BEST IDEA LONG | | 1/3/2018 | CLICK HERE