Booking Holdings Inc Valuation – January 2019 $BKNG

Company Profile (excerpt from Reuters): Booking Holdings Inc., formerly The Priceline Group Inc., incorporated on July 30, 1998, is a provider of travel and restaurant online reservation and related services. The Company, through its online travel companies (OTCs), connects consumers wishing to make travel reservations with providers of travel services across the world. It offers consumers an array of accommodation reservations (including hotels, bed and breakfasts, hostels, apartments, vacation rentals and other properties) through its Booking.com, priceline.com and agoda.com brands. Its other brands include KAYAK, Rentalcars.com and OpenTable, Inc. (OpenTable).

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of BKNG – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $84,685,840,413 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.41 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 329.88% Pass
6. Moderate PEmg Ratio PEmg < 20 30.50 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 8.77 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.41 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.57 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $59.93
MG Growth Estimate 11.55%
MG Value $1,894.30
Opinion Fairly Valued
MG Grade D+
MG Value based on 3% Growth $868.95
MG Value based on 0% Growth $509.38
Market Implied Growth Rate 11.00%
Current Price $1,827.90
% of Intrinsic Value 96.49%

Booking Holdings Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $33.85 in 2014 to an estimated $59.93 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 11% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into Booking Holdings Inc revealed the company was trading above its Graham Number of $677.42. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 30.5, which was below the industry average of 38.01, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-103.68.

Booking Holdings Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$103.68
Graham Number $677.42
PEmg 30.50
Current Ratio 2.41
PB Ratio 8.77
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Total Current Assets $9,467,847,000
Total Current Liabilities $3,930,224,000
Long-Term Debt $8,703,901,000
Total Assets $24,370,476,000
Intangible Assets $4,962,404,000
Total Liabilities $14,418,666,000
Shares Outstanding (Diluted Average) 47,751,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $87.79
Dec2017 $46.86
Dec2016 $42.65
Dec2015 $49.45
Dec2014 $45.67
Dec2013 $36.11
Dec2012 $27.66
Dec2011 $20.63
Dec2010 $10.73
Dec2009 $9.88
Dec2008 $3.74
Dec2007 $3.42
Dec2006 $1.68
Dec2005 $4.21
Dec2004 $0.76
Dec2003 $0.27
Dec2002 -$0.57
Dec2001 -$0.48
Dec2000 -$11.82
Dec1999 -$47.39
Dec1998 -$8.46

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $59.93
Dec2017 $45.38
Dec2016 $43.20
Dec2015 $40.95
Dec2014 $33.85
Dec2013 $25.63
Dec2012 $18.43
Dec2011 $12.44
Dec2010 $7.53
Dec2009 $5.48
Dec2008 $3.11
Dec2007 $2.55
Dec2006 $1.83
Dec2005 $1.55
Dec2004 -$0.64
Dec2003 -$4.89
Dec2002 -$9.56

Recommended Reading:

Other ModernGraham posts about the company

Booking Holdings Inc Valuation – April 2018 $BKNG

Other ModernGraham posts about related companies

TripAdvisor Inc Valuation – January 2019 $TRIP
ILG Inc Valuation – July 2018 $ILG
Royal Caribbean Cruises Ltd Valuation – Initial Coverage June 2018 $RCL
Expedia Group Inc Valuation – May 2018 $EXPE
Booking Holdings Inc Valuation – April 2018 $BKNG
TripAdviser Inc Valuation – March 2018 $TRIP
Expedia Inc Valuation – February 2017 $EXPE
Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP
TripAdvisor Inc. Valuation – November 2015 Update $TRIP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Booking Holdings Inc Valuation – April 2018 $BKNG

Company Profile (excerpt from Reuters): Booking Holdings Inc., formerly The Priceline Group Inc., incorporated on July 30, 1998, is a provider of travel and restaurant online reservation and related services. The Company, through its online travel companies (OTCs), connects consumers wishing to make travel reservations with providers of travel services across the world. It offers consumers an array of accommodation reservations (including hotels, bed and breakfasts, hostels, apartments, vacation rentals and other properties) through its Booking.com, priceline.com and agoda.com brands. Its other brands include KAYAK, Rentalcars.com and OpenTable, Inc. (OpenTable).

BKNG Chart

BKNG data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of BKNG – April 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $100,459,103,900 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.58 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 320.73% Pass
6. Moderate PEmg Ratio PEmg < 20 35.79 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 9.17 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.58 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.59 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $58.13
MG Growth Estimate 10.78%
MG Value $1,747.21
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $842.89
MG Value based on 0% Growth $494.11
Market Implied Growth Rate 13.64%
Current Price $2,080.39
% of Intrinsic Value 119.07%

Booking Holdings Inc. does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $33.83 in 2014 to an estimated $58.13 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 13.64% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Booking Holdings Inc. revealed the company was trading above its Graham Number of $654.27. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 35.79, which was below the industry average of 42.33, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-103.9.

Booking Holdings Inc. scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$103.90
Graham Number $654.27
PEmg 35.79
Current Ratio 2.58
PB Ratio 9.17
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Total Current Assets $9,034,805,000
Total Current Liabilities $3,497,868,000
Long-Term Debt $8,809,788,000
Total Assets $25,451,263,000
Intangible Assets $4,914,494,000
Total Liabilities $14,190,665,000
Shares Outstanding (Diluted Average) 49,624,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $82.40
Dec2017 $46.86
Dec2016 $42.65
Dec2015 $49.45
Dec2014 $45.67
Dec2013 $36.11
Dec2012 $27.66
Dec2011 $20.63
Dec2010 $10.35
Dec2009 $9.88
Dec2008 $3.74
Dec2007 $3.42
Dec2006 $1.68
Dec2005 $4.21
Dec2004 $0.76
Dec2003 $0.27
Dec2002 -$0.57
Dec2001 -$0.48
Dec2000 -$11.82
Dec1999 -$47.39
Dec1998 -$8.46

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $58.13
Dec2017 $45.38
Dec2016 $43.20
Dec2015 $40.95
Dec2014 $33.83
Dec2013 $25.58
Dec2012 $18.36
Dec2011 $12.34
Dec2010 $7.40
Dec2009 $5.48
Dec2008 $3.11
Dec2007 $2.55
Dec2006 $1.83
Dec2005 $1.55
Dec2004 -$0.64
Dec2003 -$4.89
Dec2002 -$9.56

Recommended Reading:

Other ModernGraham posts about the company

Priceline Group Inc Valuation – July 2016 $PCLN
30 Companies in the Spotlight This Week – 5/23/15
Priceline Group Annual Valuation – 2015 $PCLN
27 Companies in the Spotlight This Week – 2/14/15
Priceline Group Inc. Quarterly Valuation – February 2015 $PCLN

Other ModernGraham posts about related companies

TripAdviser Inc Valuation – March 2018 $TRIP
Expedia Inc Valuation – February 2017 $EXPE
Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP
TripAdvisor Inc. Valuation – November 2015 Update $TRIP
Expedia Inc. Analysis – October 2015 Update $EXPE
Tripadvisor Stock Analysis – August 2015 Update $TRIP
Priceline Group Annual Valuation – 2015 $PCLN
Tripadvisor Inc. Quarterly Valuation – May 2015 $TRIP
Tripadvisor Inc. Quarterly Valuation – February 2015 $TRIP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expedia Group Inc Valuation – March 2019 #EXPE

Company Profile (excerpt from Reuters): Expedia Group, Inc., formerly Expedia, Inc., incorporated on April 18, 2005, is an online travel company. The Company operates through four segments: Core Online Travel Agencies (Core OTA), trivago, Egencia and HomeAway. It has created a global travel marketplace used by a range of leisure and corporate travelers, offline retail travel agents and travel service providers. The Company offers travel and non-travel advertisers access to a source of incremental traffic and transactions through its media and advertising offerings on its transaction-based Websites. The Company’s Core OTA segment provides a range of travel and advertising services to its customers across the world, through a range of brands, including Expedia.com and Hotels.com in the United States, and localized Expedia and Hotels.com Websites throughout the world, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Wotif Group, CarRentals.com and Classic Vacations. The Company’s trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch Websites. Its Egencia segment, which also includes Orbitz Worldwide (Orbitz) for Business, provides managed travel services to corporate customers across the world. The Company’s HomeAway segment operates an online marketplace for the vacation rental industry.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPE – March 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $18,501,820,260 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.64 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 32.73% Fail
6. Moderate PEmg Ratio PEmg < 20 32.96 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.37 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.64 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -1.30 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.81
MG Growth Estimate 1.23%
MG Value $41.76
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $55.29
MG Value based on 0% Growth $32.41
Market Implied Growth Rate 12.23%
Current Price $125.67
% of Intrinsic Value 300.94%

Expedia Group Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $3.53 in 2015 to an estimated $3.81 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 12.23% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Expedia Group Inc revealed the company was trading above its Graham Number of $61.37. The company pays a dividend of $1.24 per share, for a yield of 1% Its PEmg (price over earnings per share – ModernGraham) was 32.96, which was below the industry average of 41.58, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-47.47.

Expedia Group Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$47.47
Graham Number $61.37
PEmg 32.96
Current Ratio 0.64
PB Ratio 3.37
Current Dividend $1.24
Dividend Yield 0.99%
Number of Consecutive Years of Dividend Growth 6

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Total Current Assets $5,197,000,000
Total Current Liabilities $8,060,000,000
Long-Term Debt $3,717,000,000
Total Assets $18,033,000,000
Intangible Assets $10,112,000,000
Total Liabilities $12,382,000,000
Shares Outstanding (Diluted Average) 151,344,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.00
Dec2018 $2.65
Dec2017 $2.42
Dec2016 $1.82
Dec2015 $5.70
Dec2014 $2.99
Dec2013 $1.67
Dec2012 $2.00
Dec2011 $3.41
Dec2010 $2.93
Dec2009 $2.06
Dec2008 -$17.60
Dec2007 $1.88
Dec2006 $1.40
Dec2005 $1.30
Dec2004 $0.00
Dec2003 $0.66
Dec2002 $0.46
Dec2001 $0.06

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.81
Dec2018 $2.85
Dec2017 $2.94
Dec2016 $3.08
Dec2015 $3.53
Dec2014 $2.49
Dec2013 $2.30
Dec2012 $1.26
Dec2011 $0.11
Dec2010 -$1.65
Dec2009 -$3.36
Dec2008 -$4.91
Dec2007 $1.30
Dec2006 $0.93
Dec2005 $0.63
Dec2004 $0.28
Dec2003 $0.35

Recommended Reading:

Other ModernGraham posts about the company

Expedia Group Inc Valuation – May 2018 $EXPE
Expedia Inc Valuation – February 2017 $EXPE
Expedia Inc. Analysis – October 2015 Update $EXPE
17 Companies in the Spotlight This Week – 9/27/2014
Expedia Inc. Annual Stock Valuation – 2014 $EXPE

Other ModernGraham posts about related companies

Booking Holdings Inc Valuation – January 2019 $BKNG
TripAdvisor Inc Valuation – January 2019 $TRIP
ILG Inc Valuation – July 2018 $ILG
Royal Caribbean Cruises Ltd Valuation – Initial Coverage June 2018 $RCL
Expedia Group Inc Valuation – May 2018 $EXPE
Booking Holdings Inc Valuation – April 2018 $BKNG
TripAdviser Inc Valuation – March 2018 $TRIP
Expedia Inc Valuation – February 2017 $EXPE
Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

TripAdvisor Inc Valuation – January 2019 $TRIP

Company Profile (excerpt from Reuters): TripAdvisor, Inc., incorporated on July 20, 2011, is an online travel company which owns and operates a portfolio of online travel brands. TripAdvisor, the Company’s brand, is a travel site. The Company operates through two segments: Hotel and Non-Hotel. The Company’s platform also enables users to compare real-time pricing and availability for these experiences, as well as to book hotels, flights, cruises, vacation rentals, tours, activities and attractions, and restaurants, on either a TripAdvisor site or application, or a travel partner site or application. As of December 31, 2017, the Company’s TripAdvisor-branded Websites included tripadvisor.com in the United States and localized versions of the TripAdvisor Website in 48 markets and 28 languages around the world. As of December 31, 2017, the Company featured approximately 600 million reviews and opinions on 7.5 million places to stay, places to eat and things to do, including 1,060,000 hotels and accommodations and 835,000 vacation rentals, 4.6 million restaurants and 915,000 activities and attractions around the world.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TRIP – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,712,066,189 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.04 Pass
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 9.09% Fail
6. Moderate PEmg Ratio PEmg < 20 84.28 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.48 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.04 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Fail
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.66
MG Growth Estimate -4.25%
MG Value $1.25
Opinion Overvalued
MG Grade F
MG Value based on 3% Growth $9.64
MG Value based on 0% Growth $5.65
Market Implied Growth Rate 37.89%
Current Price $56.02
% of Intrinsic Value 4487.97%

Tripadvisor Inc Common Stock does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the lack of earnings stability or growth over the last five years, and the lack of dividends. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $1.34 in 2014 to an estimated $0.66 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 37.89% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Tripadvisor Inc Common Stock revealed the company was trading above its Graham Number of $12.95. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 84.28, which was above the industry average of 38.01. Finally, the company was trading above its Net Current Asset Value (NCAV) of $1.25.

Tripadvisor Inc Common Stock scores quite poorly in the ModernGraham grading system, with an overall grade of F.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $1.25
Graham Number $12.95
PEmg 84.28
Current Ratio 2.04
PB Ratio 5.48
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Total Current Assets $926,000,000
Total Current Liabilities $453,000,000
Long-Term Debt $0
Total Assets $2,192,000,000
Intangible Assets $889,000,000
Total Liabilities $750,000,000
Shares Outstanding (Diluted Average) 141,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.76
Dec2017 -$0.14
Dec2016 $0.82
Dec2015 $1.36
Dec2014 $1.55
Dec2013 $1.41
Dec2012 $1.37
Dec2011 $1.32

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.66
Dec2017 $0.74
Dec2016 $1.23
Dec2015 $1.42
Dec2014 $1.34
Dec2013 $1.10
Dec2012 $0.81
Dec2011 $0.44

Recommended Reading:

Other ModernGraham posts about the company

10 Most Overvalued Stocks of the S&P 500 – July 2018
TripAdviser Inc Valuation – March 2018 $TRIP
TripAdvisor Inc Valuation – June 2016 $TRIP
TripAdvisor Inc. Valuation – November 2015 Update $TRIP
Tripadvisor Stock Analysis – August 2015 Update $TRIP

Other ModernGraham posts about related companies

ILG Inc Valuation – July 2018 $ILG
Royal Caribbean Cruises Ltd Valuation – Initial Coverage June 2018 $RCL
Expedia Group Inc Valuation – May 2018 $EXPE
Booking Holdings Inc Valuation – April 2018 $BKNG
TripAdviser Inc Valuation – March 2018 $TRIP
Expedia Inc Valuation – February 2017 $EXPE
Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP
TripAdvisor Inc. Valuation – November 2015 Update $TRIP
Expedia Inc. Analysis – October 2015 Update $EXPE

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

ILG Inc Valuation – July 2018 $ILG

Company Profile (excerpt from Reuters): ILG, Inc., formerly Interval Leisure Group, Inc., incorporated on May 9, 2008, is a provider of professionally delivered vacation experiences. The Company is a global licensee for the Hyatt, Westin and Sheraton brands in vacation ownership. The Company operates through two segments: Exchange and Rental, and Vacation Ownership. Its Exchange and Rental segment offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rental, working with resort developers and operating vacation rental properties. Its Vacation Ownership segment engages in the management of vacation ownership resorts; sales, marketing, and financing of vacation ownership interests, and related services to owners and associations.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of ILG – July 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $4,150,781,418 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.77 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 146.92% Pass
6. Moderate PEmg Ratio PEmg < 20 21.18 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.39 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.77 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.70 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.56
MG Growth Estimate 6.03%
MG Value $32.07
Opinion Fairly Valued
MG Grade C+
MG Value based on 3% Growth $22.61
MG Value based on 0% Growth $13.25
Market Implied Growth Rate 6.34%
Current Price $33.03
% of Intrinsic Value 102.98%

ILG Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, poor dividend history, and the high PEmg ratio. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Fairly Valued after growing its EPSmg (normalized earnings) from $1.11 in 2014 to an estimated $1.56 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 6.34% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value within a margin of safety relative to the price.

At the time of valuation, further research into ILG Inc revealed the company was trading above its Graham Number of $19.59. The company pays a dividend of $0.6 per share, for a yield of 1.8% Its PEmg (price over earnings per share – ModernGraham) was 21.18, which was below the industry average of 40.73, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-5.89.

ILG Inc receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$5.89
Graham Number $19.59
PEmg 21.18
Current Ratio 1.77
PB Ratio 2.39
Current Dividend $0.60
Dividend Yield 1.82%
Number of Consecutive Years of Dividend Growth 1

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $1,291,000,000
Total Current Liabilities $728,000,000
Long-Term Debt $958,000,000
Total Assets $3,770,000,000
Intangible Assets $1,003,000,000
Total Liabilities $2,032,000,000
Shares Outstanding (Diluted Average) 125,751,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.27
Dec2017 $1.34
Dec2016 $2.60
Dec2015 $1.26
Dec2014 $1.36
Dec2013 $1.40
Dec2012 $0.71
Dec2011 $0.71
Dec2010 $0.73
Dec2009 $0.67
Dec2008 $0.80
Dec2007 $1.26
Dec2006 $0.97
Dec2005 $0.82

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.56
Dec2017 $1.67
Dec2016 $1.71
Dec2015 $1.20
Dec2014 $1.11
Dec2013 $0.94
Dec2012 $0.71
Dec2011 $0.76
Dec2010 $0.81
Dec2009 $0.87
Dec2008 $0.91
Dec2007 $0.84
Dec2006 $0.54
Dec2005 $0.27

Recommended Reading:

Other ModernGraham posts about the company

ILG Inc Valuation – Initial Coverage $ILG

Other ModernGraham posts about related companies

Royal Caribbean Cruises Ltd Valuation – Initial Coverage June 2018 $RCL
Expedia Group Inc Valuation – May 2018 $EXPE
Booking Holdings Inc Valuation – April 2018 $BKNG
TripAdviser Inc Valuation – March 2018 $TRIP
Expedia Inc Valuation – February 2017 $EXPE
Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP
TripAdvisor Inc. Valuation – November 2015 Update $TRIP
Expedia Inc. Analysis – October 2015 Update $EXPE
Tripadvisor Stock Analysis – August 2015 Update $TRIP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Royal Caribbean Cruises Ltd Valuation – Initial Coverage June 2018 $RCL

Company Profile (excerpt from Reuters): Royal Caribbean Cruises Ltd., incorporated on July 23, 1985, is a cruise company. The Company owns and operates three global cruise brands: Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises (Global Brands). The Company also own joint venture interest in the German brand TUI Cruises, interest in the Spanish brand Pullmantur and interest in the Chinese brand SkySea Cruises (collectively, Partner Brands). Together, its Global Brands and its Partner Brands operate a combined total of 49 ships in the cruise vacation industry with an aggregate capacity of approximately 123,270 berths, as of December 31, 2016. As of December 31, 2016, the Company’s ships offer a selection of itineraries that call on approximately 535 destinations in 105 countries, covering all seven continents.

RCL Chart

RCL data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of RCL – June 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $22,515,040,396 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.20 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 274.19% Pass
6. Moderate PEmg Ratio PEmg < 20 15.90 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.13 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.20 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -1.84 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $6.69
MG Growth Estimate 15.00%
MG Value $257.39
Opinion Undervalued
MG Grade C
MG Value based on 3% Growth $96.94
MG Value based on 0% Growth $56.83
Market Implied Growth Rate 3.70%
Current Price $106.33
% of Intrinsic Value 41.31%

Royal Caribbean Cruises Ltd does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, poor dividend history. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.26 in 2014 to an estimated $6.69 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.7% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Royal Caribbean Cruises Ltd revealed the company was trading above its Graham Number of $98.41. The company pays a dividend of $2.16 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 15.9, which was below the industry average of 49.49, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-57.54.

Royal Caribbean Cruises Ltd receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$57.54
Graham Number $98.41
PEmg 15.90
Current Ratio 0.20
PB Ratio 2.13
Current Dividend $2.16
Dividend Yield 2.03%
Number of Consecutive Years of Dividend Growth 7

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $1,034,526,000
Total Current Liabilities $5,195,154,000
Long-Term Debt $7,664,722,000
Total Assets $23,970,972,000
Intangible Assets $288,479,000
Total Liabilities $13,324,176,000
Shares Outstanding (Diluted Average) 213,602,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $8.58
Dec2017 $7.53
Dec2016 $5.93
Dec2015 $3.02
Dec2014 $3.43
Dec2013 $2.14
Dec2012 $0.08
Dec2011 $2.77
Dec2010 $2.37
Dec2009 $0.75
Dec2008 $2.68
Dec2007 $2.82
Dec2006 $2.94
Dec2005 $3.26
Dec2004 $2.26
Dec2003 $1.42
Dec2002 $1.79
Dec2001 $1.32
Dec2000 $2.31
Dec1999 $2.06
Dec1998 $1.83

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $6.69
Dec2017 $5.30
Dec2016 $3.76
Dec2015 $2.54
Dec2014 $2.26
Dec2013 $1.65
Dec2012 $1.52
Dec2011 $2.25
Dec2010 $2.10
Dec2009 $2.14
Dec2008 $2.82
Dec2007 $2.77
Dec2006 $2.61
Dec2005 $2.30
Dec2004 $1.82
Dec2003 $1.66
Dec2002 $1.81

Recommended Reading:

Other ModernGraham posts about the company

None. This is the first time ModernGraham has covered the company.

Other ModernGraham posts about related companies

Expedia Group Inc Valuation – May 2018 $EXPE
Booking Holdings Inc Valuation – April 2018 $BKNG
TripAdviser Inc Valuation – March 2018 $TRIP
Expedia Inc Valuation – February 2017 $EXPE
Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP
TripAdvisor Inc. Valuation – November 2015 Update $TRIP
Expedia Inc. Analysis – October 2015 Update $EXPE
Tripadvisor Stock Analysis – August 2015 Update $TRIP
Priceline Group Annual Valuation – 2015 $PCLN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Expedia Group Inc Valuation – May 2018 $EXPE

Company Profile (excerpt from Reuters): Expedia Group, Inc., formerly Expedia, Inc., incorporated on April 18, 2005, is an online travel company. The Company operates through four segments: Core Online Travel Agencies (Core OTA), trivago, Egencia and HomeAway. It has created a global travel marketplace used by a range of leisure and corporate travelers, offline retail travel agents and travel service providers. The Company offers travel and non-travel advertisers access to a source of incremental traffic and transactions through its media and advertising offerings on its transaction-based Websites. The Company’s Core OTA segment provides a range of travel and advertising services to its customers across the world, through a range of brands, including Expedia.com and Hotels.com in the United States, and localized Expedia and Hotels.com Websites throughout the world, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Wotif Group, CarRentals.com and Classic Vacations. The Company’s trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch Websites. Its Egencia segment, which also includes Orbitz Worldwide (Orbitz) for Business, provides managed travel services to corporate customers across the world. The Company’s HomeAway segment operates an online marketplace for the vacation rental industry.

EXPE Chart

EXPE data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of EXPE – May 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $17,072,540,487 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.74 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -7.74% Fail
6. Moderate PEmg Ratio PEmg < 20 36.22 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 4.11 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.74 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -1.47 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.14
MG Growth Estimate 3.89%
MG Value $51.11
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $45.51
MG Value based on 0% Growth $26.68
Market Implied Growth Rate 13.86%
Current Price $113.68
% of Intrinsic Value 222.41%

Expedia Group Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings growth over the last ten years, and the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $2.49 in 2014 to an estimated $3.14 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 13.86% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Expedia Group Inc revealed the company was trading above its Graham Number of $48.51. The company pays a dividend of $1.16 per share, for a yield of 1% Its PEmg (price over earnings per share – ModernGraham) was 36.22, which was below the industry average of 40.97, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-57.98.

Expedia Group Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$57.98
Graham Number $48.51
PEmg 36.22
Current Ratio 0.74
PB Ratio 4.11
Current Dividend $1.16
Dividend Yield 1.02%
Number of Consecutive Years of Dividend Growth 5

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $7,431,000,000
Total Current Liabilities $9,991,000,000
Long-Term Debt $3,771,000,000
Total Assets $20,429,000,000
Intangible Assets $10,494,000,000
Total Liabilities $16,234,000,000
Shares Outstanding (Diluted Average) 151,817,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.51
Dec2017 $2.42
Dec2016 $1.82
Dec2015 $5.70
Dec2014 $2.99
Dec2013 $1.67
Dec2012 $2.00
Dec2011 $3.41
Dec2010 $2.93
Dec2009 $2.06
Dec2008 -$17.60
Dec2007 $1.88
Dec2006 $1.40
Dec2005 $1.30
Dec2004 $0.00
Dec2003 $0.66
Dec2002 $0.46
Dec2001 $0.06

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.14
Dec2017 $2.94
Dec2016 $3.08
Dec2015 $3.53
Dec2014 $2.49
Dec2013 $2.30
Dec2012 $1.26
Dec2011 $0.11
Dec2010 -$1.65
Dec2009 -$3.36
Dec2008 -$4.91
Dec2007 $1.30
Dec2006 $0.93
Dec2005 $0.63
Dec2004 $0.28
Dec2003 $0.35
Dec2002 $0.17

Recommended Reading:

Other ModernGraham posts about the company

Expedia Inc Valuation – February 2017 $EXPE
Expedia Inc. Analysis – October 2015 Update $EXPE
17 Companies in the Spotlight This Week – 9/27/2014
Expedia Inc. Annual Stock Valuation – 2014 $EXPE

Other ModernGraham posts about related companies

Booking Holdings Inc Valuation – April 2018 $BKNG
TripAdviser Inc Valuation – March 2018 $TRIP
Expedia Inc Valuation – February 2017 $EXPE
Priceline Group Inc Valuation – July 2016 $PCLN
TripAdvisor Inc Valuation – June 2016 $TRIP
TripAdvisor Inc. Valuation – November 2015 Update $TRIP
Expedia Inc. Analysis – October 2015 Update $EXPE
Tripadvisor Stock Analysis – August 2015 Update $TRIP
Priceline Group Annual Valuation – 2015 $PCLN
Tripadvisor Inc. Quarterly Valuation – May 2015 $TRIP

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

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