Booking Holdings Share Price Down 21%: Is BKNG on Sale?

The Booking Holdings share price has fallen 21% since August and sits 14% lower year to date, even as the underlying business continues to compound at rates most S&P 500 peers would envy. At 17.5 times forward earnings, BKNG is trading close to its cheapest forward multiple in roughly a decade. The question is whether the market has the thesis right or wrong.

A Business That Keeps Delivering

The headline numbers for the full year 2024 were hard to argue with. Room nights booked exceeded 1.2 billion, up 8% year on year. Revenue grew 13% to just under $27bn, adjusted EBITDA rose 20% to $9.9bn, and the net margin held at 20% despite an 8% slip in net income to $5.4bn, partly attributable to impairment charges. Free cash flow of approximately $9.1bn funded $8.2bn in shareholder returns, and the share count has been cut by 22% since 2022.

The momentum carried into 2025. In Q1 2025 (at constant currency), gross bookings grew 8%, revenue rose 10%, and room nights increased 6%. Management cited the same structural tailwinds: network depth, partner relationships, and the Genius loyalty programme, which now accounts for more than 30% of active users at tiers 2 and 3.

The most recent filing adds further texture. According to the Q1 2026 10-Q, Booking Holdings reported total revenues of $5.53bn for the quarter (up from $4.76bn a year earlier), net income of $1.08bn (versus $333m), and room nights of 338 million, a 5.9% increase. Merchant gross bookings grew 24.3%, and the company repurchased $4.02bn of its own stock in the quarter alone, alongside $343m in dividends.

The multi-year EBITDA trajectory in the FY2025 10-K reinforces the compounding story. Segment Adjusted EBITDA less Capex rose to $9,852m in 2025, up from $8,179m in 2024 and $7,020m in 2023. The 2025 figure absorbs a $457m impairment charge and $203m in transformation costs, neither of which appeared in 2024, which means the underlying cash generation is stronger than the headline suggests.

Why the Booking Holdings Share Price Has Struggled

Two concerns have weighed on sentiment. The first is the conflict in the Middle East, which has visibly crimped gross bookings growth in recent quarters and remains an operational drag for as long as the situation persists. This is a real near-term risk, not a theoretical one.

The second is the AI disruption thesis: if autonomous agents can scout prices across the web and complete bookings without the consumer ever opening an app, the intermediary loses its reason to exist. It is a coherent worry on paper. In practice, agentic travel booking at consumer scale is not yet a reality, and Booking itself is integrating AI features, including natural-language trip planning, that could deepen rather than erode its position.

CEO Glenn Fogel framed the long-term case plainly in the company’s own communications: ‘Our data, deep industry knowledge, and relationships with millions of partners on the ground remain a critical differentiator to propel future growth…The long-term drivers of our industry remain compelling.’

That argument rests on the network effects that have taken two decades to build. Booking.com, Priceline, Agoda, KAYAK and OpenTable collectively sit on a dataset and a supplier relationship base that a pure-AI rival would need years to replicate, if it could at all.

Valuation Setup at 17.5 Times Forward Earnings

At a P/E of 17.5 times forward earnings, BKNG is priced well below its historical average for a business generating north of $9bn in annual cash EBITDA and buying back stock aggressively. The earnings history shows consistent margin expansion across cycles, and the Q1 2026 results confirm the cadence has not broken.

The thesis breaks if AI-driven agents genuinely disintermediate the booking funnel at scale within the next two to three years, or if a prolonged Middle East conflict depresses international travel beyond the current market expectation. Both are possible; neither is the base case today.

The next test comes with Q2 2026 guidance, where management’s commentary on Middle East bookings and AI agent adoption will tell investors more than any single revenue line. That is the moment to reassess.