Booking Holdings Inc.BKNGNASDAQ

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $8,988.19 per share(market-calibrated)

+116.1%

Upside to Fair Value

Current

$4,159.69

Pure Model

$9,306.58

Fair Value

$8,988.19

Bull Case

$11,933.67

Bear Case

$7,078.20

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

0.50%

Calibrated Growth

2.13%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $9,306.58.

What's Driving This Ratingfor BKNG

✓

CapEx already efficient

CapEx at 1.31% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 53.64% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

↑

Strong near-term revenue growth

Analyst consensus projects 11.30% revenue growth in Year 1, fading to 6.51% by Year 5 and 3.00% by Year 10. Revenue reaches $50.2B by Year 10 (vs $26.9B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 250bps below the model's 3.00%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 77.18% indicates efficient cash generation. FCF reaches $21.8B by Year 10 (43.35% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.19

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.84%

Cost of Debt

Pre-tax Cost of Debt4.70%

Tax Rate20.90%

After-tax Cost of Debt3.72%

Equity Weight (E/V)87.50%

Debt Weight (D/V)12.50%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (87.50% × 9.84%) + (12.50% × 3.72%)

= 9.07%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$30.0B	$35.2B	$40.5B	$45.0B	$50.2B
EBIT	$16.1B	$18.9B	$21.7B	$24.2B	$26.9B
Tax	$3.4B	$3.9B	$4.5B	$5.0B	$5.6B
NOPAT	$12.7B	$14.9B	$17.2B	$19.1B	$21.3B
+ Depreciation	$755M	$885M	$1.0B	$1.1B	$1.3B
- Capex	$394M	$462M	$532M	$591M	$660M
- Δ NWC	$304M	$264M	$247M	$219M	$146M
Free Cash Flow	$12.8B	$15.1B	$17.4B	$19.4B	$21.8B
Discount Factor	0.917	0.771	0.648	0.545	0.420
Present Value	$11.7B	$11.6B	$11.3B	$10.6B	$9.1B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$21.8B

Terminal Growth Rate3.00%

WACC9.07%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$369.2B

PV of Terminal Value$154.9B

Exit Multiple Method

Year 10 EBITDA$28.2B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$564.0B

PV of Terminal Value$236.7B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$108.3B

PV of Terminal Value$154.9B

Enterprise Value$263.2B

(-) Net Debt$2.1B

Equity Value$261.1B

Shares Outstanding32M

Price per Share$8,047.15

Exit Multiple Method

PV of Projected FCFs$108.3B

PV of Terminal Value$236.7B

Enterprise Value$345.0B

(-) Net Debt$2.1B

Equity Value$342.9B

Shares Outstanding32M

Price per Share$10,566.00

Pure Model Fair Value

$9,306.58

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
7.07%	$11,413.64	$11,804.58	$12,291.52	$12,914.79	$13,740.97
8.07%	$10,030.73	$10,277.16	$10,572.19	$10,931.75	$11,379.61
9.07%	$8,949.14	$9,114.26	$9,306.58	$9,533.41	$9,804.96
10.07%	$8,068.65	$8,184.31	$8,316.32	$8,468.42	$8,645.57
11.07%	$7,331.76	$7,415.55	$7,509.73	$7,616.35	$7,738.04

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$7,078.20

70.2% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 1.48

Base Case

$9,306.58

123.7% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 1.19

Bull Case

$11,933.67

186.9% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 1.01

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Consumer Cyclical Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth11.30%

Year 3 Revenue Growth8.11%

Year 5 Revenue Growth6.51%

Year 7 Revenue Growth5.11%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin53.64%

Tax Rate20.90%

Historical Capex / Rev1.31%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Cyclical sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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