Stock Analysis on Net

Booking Holdings Inc. (NASDAQ:BKNG)

$24.99

Economic Value Added (EVA)

Microsoft Excel

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.


Economic Profit

Booking Holdings Inc., economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= × =


Net Operating Profit After Taxes (NOPAT)
The net operating profit after taxes shows a significant upward trend over the five-year period. It starts at 670 million USD in 2020 and remains relatively stable into 2021 at 671 million USD. From 2022 onward, there is a pronounced increase, reaching 2,965 million USD, followed by further growth to 3,758 million USD in 2023, and peaking at 6,151 million USD in 2024. This indicates substantial improvement in operational efficiency or profitability over time.
Cost of Capital
The cost of capital remains relatively stable between 16.64% and 17.01% over the observed years. It increases slightly from 16.64% in 2020 to a peak of 17.01% in 2024. This incremental increase suggests a modest rise in the risk or required return by investors, but the change is not dramatic.
Invested Capital
Invested capital exhibits some fluctuations without a clear upward or downward trend. It starts at 14,563 million USD in 2020, slightly increases to 15,004 million USD in 2021, then decreases to 13,642 million USD in 2022, followed by a further decline to 11,415 million USD in 2023. There is a rebound in 2024, rising to 12,973 million USD. Overall, this pattern suggests periods of divestment or asset reduction followed by partial reinvestment.
Economic Profit
Economic profit shows a marked improvement throughout the period. Initially, it is negative, with losses of 1,753 million USD in 2020 and 1,856 million USD in 2021, indicating that the company was not covering its cost of capital. Beginning in 2022, economic profit turns positive at 690 million USD and continues to grow significantly to 1,819 million USD in 2023, reaching 3,943 million USD in 2024. This shift from negative to positive economic profit points to enhanced value creation and effective capital utilization.

Net Operating Profit after Taxes (NOPAT)

Booking Holdings Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income
Deferred income tax expense (benefit)1
Increase (decrease) in allowance for expected credit losses2
Increase (decrease) in restructuring liabilities3
Increase (decrease) in equity equivalents4
Interest expense
Interest expense, operating lease liability5
Adjusted interest expense
Tax benefit of interest expense6
Adjusted interest expense, after taxes7
(Gain) loss on marketable securities
Interest and dividend income
Investment income, before taxes
Tax expense (benefit) of investment income8
Investment income, after taxes9
Net operating profit after taxes (NOPAT)

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for expected credit losses.

3 Addition of increase (decrease) in restructuring liabilities.

4 Addition of increase (decrease) in equity equivalents to net income.

5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

6 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

7 Addition of after taxes interest expense to net income.

8 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

9 Elimination of after taxes investment income.


The financial data indicates a pronounced upward trajectory in both net income and net operating profit after taxes (NOPAT) over the five-year period from 2020 to 2024. Specifically, net income exhibits significant growth, increasing from 59 million US dollars in 2020 to 5,882 million US dollars in 2024. This represents a nearly hundredfold rise, with the most substantial increases occurring between 2020 and 2021, and continuing robustly in the subsequent years.

Similarly, NOPAT trends upward, starting at 670 million US dollars in 2020 and reaching 6,151 million US dollars by 2024. This steady increase reflects growing operating efficiency and profitability after accounting for taxes over the period.

Net Income
2020: 59 million US dollars
2021: 1,165 million US dollars
2022: 3,058 million US dollars
2023: 4,289 million US dollars
2024: 5,882 million US dollars
Net Operating Profit After Taxes (NOPAT)
2020: 670 million US dollars
2021: 671 million US dollars
2022: 2,965 million US dollars
2023: 3,758 million US dollars
2024: 6,151 million US dollars

The disparity between the net income and NOPAT values in earlier years, particularly in 2020 and 2021 where net income is substantially lower than NOPAT, may signal differences in non-operating items, interest expenses, or taxes impacting net income. From 2022 onwards, the figures for both metrics converge more closely, indicating stronger alignment between operating performance and final profitability.

Overall, the data reveals marked improvement in financial performance, with increases in both earnings measures suggesting effective operational management and growth in core business profitability. This positive trend underscores an expanding capacity to generate net profits from operating activities over the period analyzed.


Cash Operating Taxes

Booking Holdings Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Income tax expense
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense
Less: Tax imposed on investment income
Cash operating taxes

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).


The income tax expense exhibited a fluctuating upward trend over the five-year period. Beginning at 508 million US dollars in 2020, the expense decreased significantly to 300 million in 2021, followed by a sharp increase to 865 million in 2022. The upward momentum continued with the tax expense rising to 1,192 million in 2023 and further to 1,410 million in 2024, indicating increasing tax obligations over the most recent years.

Cash operating taxes, which typically reflect the actual cash outflows for taxes, showed a consistent increase from 362 million US dollars in 2020 to a peak of 1,650 million in 2023. This represents more than a fourfold increase within four years. However, in 2024, a decline to 1,355 million was observed, slightly reducing the cash tax burden compared to the previous year but still maintaining a substantially higher level relative to the earlier years.

Income Tax Expense Trends
Initial decline between 2020 and 2021 followed by substantial growth through 2024.
Cash Operating Taxes Trends
Strong upward trajectory from 2020 to 2023, with a decrease noted in 2024.
Comparison Insights
The divergence in behavior during 2021, when income tax expense significantly dropped while cash operating taxes increased, could suggest timing differences or changes in non-cash tax items. The overall rising trend in both metrics from 2022 onwards aligns with increasing taxable income or changes in tax rates or regulations.

Invested Capital

Booking Holdings Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current finance lease liabilities
Short-term debt
Non-current finance lease liabilities
Long-term debt
Operating lease liability1
Total reported debt & leases
Stockholders’ equity (deficit)
Net deferred tax (assets) liabilities2
Allowance for expected credit losses3
Restructuring liabilities4
Equity equivalents5
Accumulated other comprehensive (income) loss, net of tax6
Adjusted stockholders’ equity (deficit)
Building construction-in-progress7
Marketable securities8
Invested capital

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of restructuring liabilities.

5 Addition of equity equivalents to stockholders’ equity (deficit).

6 Removal of accumulated other comprehensive income.

7 Subtraction of building construction-in-progress.

8 Subtraction of marketable securities.


Total reported debt & leases
The total reported debt and leases exhibited an overall upward trend from 2020 to 2024. Starting at $12,539 million in 2020, the debt decreased slightly to $11,430 million in 2021 but then increased consistently over the following years, reaching $17,236 million by 2024. This indicates a rising reliance on debt financing or increased lease obligations over the analyzed period.
Stockholders’ equity (deficit)
Stockholders’ equity showed significant volatility and a declining trajectory across the five-year span. The value rose from $4,893 million in 2020 to a peak of $6,178 million in 2021. However, it dropped sharply to $2,782 million in 2022 and then moved into negative territory, reaching a deficit of $2,744 million in 2023 and further declining to a deficit of $4,020 million in 2024. This substantial decrease suggests deteriorating net asset value, potentially due to accumulated losses, share repurchases, or other equity-reducing activities.
Invested capital
Invested capital stayed relatively stable initially but showed a downward trend over time. It modestly increased from $14,563 million in 2020 to $15,004 million in 2021, followed by declines in the subsequent years, reaching a low of $11,415 million in 2023. A slight recovery occurred in 2024 when invested capital rose to $12,973 million. The pattern indicates possible divestitures, asset sales, or reductions in net operating assets before some stabilization or reinvestment in the last year.

Cost of Capital

Booking Holdings Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Outstanding debt and finance lease liabilities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2024-12-31).

1 US$ in millions

2 Equity. See details »

3 Outstanding debt and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Outstanding debt and finance lease liabilities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2023-12-31).

1 US$ in millions

2 Equity. See details »

3 Outstanding debt and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Outstanding debt and finance lease liabilities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2022-12-31).

1 US$ in millions

2 Equity. See details »

3 Outstanding debt and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Outstanding debt and finance lease liabilities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2021-12-31).

1 US$ in millions

2 Equity. See details »

3 Outstanding debt and finance lease liabilities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Outstanding debt and finance lease liabilities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2020-12-31).

1 US$ in millions

2 Equity. See details »

3 Outstanding debt and finance lease liabilities. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Booking Holdings Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Airbnb Inc.
Chipotle Mexican Grill Inc.
McDonald’s Corp.
Starbucks Corp.

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.


Economic Profit
The economic profit showed a negative trend in 2020 and 2021, registering -1753 million and -1856 million US dollars respectively. However, a significant reversal occurred in 2022 with the economic profit turning positive to 690 million US dollars. This positive trend continued and strengthened in 2023 and 2024, recording economic profits of 1819 million and 3943 million US dollars respectively. The progression indicates an improving profitability position over the five-year period.
Invested Capital
The invested capital experienced fluctuations during the period. Starting at 14563 million US dollars in 2020, it slightly increased to 15004 million in 2021, before declining notably to 13642 million in 2022 and continuing to decrease to 11415 million in 2023. In 2024, there was a moderate recovery to 12973 million US dollars. The overall trend suggests a decrease in invested capital from 2021 to 2023, followed by a partial recovery in 2024.
Economic Spread Ratio
The economic spread ratio was negative in 2020 and 2021, recorded at -12.04% and -12.37% respectively, indicating that the returns on invested capital were below the cost of capital. In 2022, the ratio turned positive to 5.06%, which further improved significantly to 15.94% in 2023 and reached 30.4% in 2024. This ascending trend shows improved efficiency in generating returns above the cost of capital over the years.

Economic Profit Margin

Booking Holdings Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1
Revenues
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Airbnb Inc.
Chipotle Mexican Grill Inc.
McDonald’s Corp.
Starbucks Corp.

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

1 Economic profit. See details »

2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × ÷ =

3 Click competitor name to see calculations.


The financial data reveals a significant and positive transformation in the economic profit and related metrics over the five-year period. The economic profit, initially negative, shows a marked improvement from a loss of 1,753 million US dollars in 2020 to a positive 3,943 million US dollars by the end of 2024. This turnaround indicates an enhanced ability of the company to generate value above its cost of capital.

Revenues exhibit a robust upward trend throughout the period, increasing steadily from 6,796 million US dollars in 2020 to 23,739 million US dollars in 2024. This consistent revenue growth suggests successful expansion or increased sales volume, contributing to the improved profitability metrics observed.

The economic profit margin, which measures the economic profit as a percentage of revenues, follows a similar trajectory. Starting from a significant negative margin of -25.8% in 2020, the figure improves year over year, turning positive in 2022 at 4.04%, and increasing to 16.61% by 2024. The progression from negative to positive margins demonstrates an increasing efficiency in converting revenues into economic profit, reflecting improved operational and financial performance.

Overall, the data points to a company that has effectively enhanced its revenue base while simultaneously recovering from earlier economic losses to achieve strong economic profitability margins. The steady growth in revenues combined with the shift from negative to positive economic profit margins represents a commendable improvement in financial health and value creation over the evaluated period.