Key Points
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Q1 results were solid, but not everyone was happy about guidance — and that has sent the stock sliding.
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Easing Middle East tensions and less macroeconomic pressure could help the travel site deliver better results.
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The stock trades at a low valuation and could rebound if Q2 shows the Mideast conflict had a limited impact.
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Some dips present good buying opportunities, and Booking Holdings (NASDAQ: BKNG) may qualify. The travel platform’s shares are down by roughly 20% year to date despite healthy fundamentals. Here’s what investors should know before buying the dip.
Macroeconomic factors and the Mideast war could slow revenue growth
Booking Holdings delivered 16% year-over-year revenue growth in the first quarter, but only expects a high-single-digit growth rate for full-year 2026. The company mentioned in its Q1 press release that a prolonged disruption in the Middle East could introduce “broader inflationary pressures” that could impact jet fuel prices, traveler sentiment, and the travel value chain.
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Easing tensions in the Middle East may be enough for Booking Holdings to maintain elevated revenue growth. The U.S. and Iran recently signed an initial agreement to end the war, but the past few months have taught investors that it’s not truly over until it is over.
The guidance was a letdown from otherwise good results. Investors may hope that this is just softball guidance and that the company delivers beat-and-raise results throughout the year.
For instance, in Q2 2025, Booking Holdings guided for 8% year-over-year revenue growth in Q3 2025 at the midpoint. When it came time to actually report those results, the company reported it had grown its revenue by 13% year over year. That’s not to say Booking Holdings is guaranteed to beat its 2026 guidance, but there is a recent precedent for that scenario.
Investor pessimism has made the stock’s valuation compelling
Booking Holdings’ strong Q1 and history of beating guidance suggest that things won’t be as bad as full-year 2026 guidance would have you believe. Meanwhile, the stock trades at a 22.6 P/E ratio; it traded closer to a 40 P/E multiple last year. If growth rates remain similar to Q1 throughout the year, it should get closer to last year’s valuation.
The stock also has a yield of almost 1%. It’s rare to find Booking Holdings offering that type of yield for new investors. It further goes to show how much the stock has dipped year to date and that it may be an overreaction from investors.
The big tests for Booking Holdings are if the Middle East conflict and macroeconomic tensions ease. That will influence actual results, and positive scenarios for each of those cases can help the company beat and raise guidance throughout the year. If that happens, Booking Holdings looks like a compelling value stock at current levels. The stock can regain momentum quickly based on its 92% return over the past five years.
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Booking Holdings. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
