Executive Summary
Market Cap
$142.4B
32.64M diluted shares
Enterprise Value
$144.5B
MktCap + Debt + Leases − Cash
Normalized NOPAT
$7,420M
Rev $26.9B × 31.8% norm. margin × (1−20.5%)
FCF FY2025
$9,087M
FCF Margin 33.8%
Implied IRR (Equity)
19.7%
Hurdle 12.0% MoS +7.7%
ROIC 3yr Avg (FY23-25)
91.5%
vs. WACC 8.61% · Spread +82.9%
WACC
8.61%
β 1.20 · Ke 9.23% · ERP 4.23%
Key Model Inputs — Single Source of Truth
Valuation Inputs
Normalized NOPAT$7,420M
Revenue Base (no-growth)$26,917M
Normalized Op Margin31.8%
Tax Rate (Normalized)20.5%
WACC8.61%
Diluted Shares (M)32.639
IRR Assumptions
Selected ROIC (reinv. growth)91.5%
Organic Growth (DP17)1.5%
Reinvestment Growth9.5%
Exit Multiple (DP15)20× EV/NOPAT
Sustainable Buybacks (DP16)$6,500M/yr
Investment Horizon5 years
Capital & Adjustments
S&M Capitalization3yr useful life (DP3)
R&D CapitalizationN/A — no separate R&D in 10-K
SBC TreatmentCase A — already in OpEx
Normalization WindowFY2022-FY2025 (4yr)
Items NormalizedFY23: $896M · FY25: $457M
Goodwill in RV (DP12)0%
Revenue & NOPAT — FY2020–2025 ($M)
Operating & Net Margins (%)
CFO vs. FCF vs. Buybacks ($M)
Capital Deployment FY2025
Reproduction Value — Estimated Cost to Replicate Booking Holdings Assets from Scratch
RV Total ($M)
$16,502M
Net assets at reproduction cost
RV / Share
Price / RV
8.6×
Premium over reproduction value
EPV / RV — Moat Test
5.07× MOAT ✓
Franchise confirmed — EPV greatly exceeds reproduction cost
Edit the % Adjustment directly in the table to evaluate scenarios. Totals recalculate in real time.
| Item | Book Value ($M) | % Adjustment | Reproduction Cost ($M) | Method / Rationale |
|---|---|---|---|---|
| Tangible Assets (from balance sheet) | ||||
| Cash & Equivalentes | 17,203 | % | 17,203 | 100% — Liquid asset |
| Short-Term Investments | 582 | % | 582 | 100% — Marketable securities |
| Accounts Receivable, Net | 3,820 | % | 3,705 | 97% — Agency/merchant receivables, low default risk |
| Prepaid Expenses | 611 | % | 550 | 90% — Mostly recoverable |
| Other Current Assets | 48 | % | 38 | 80% — Mixed current items |
| PP&E, Net | 807 | % | 686 | 85% — Tech infrastructure, leasehold improvements |
| Subtotal Tangibles | 23,071 | 22,765 | ||
| Intangible Assets (rebuild from scratch) | ||||
| S&M Asset (Unamortized Marketing) | 15,296 | % | 15,296 | 100% — Capitalized marketing (3yr amort, DP3) |
| Goodwill (accounting) | 2,669 | % | 0 | 0% — ALWAYS 0 in RV (DP12). Components reconstructed individually |
| Brand / Trademarks | — | EST | ~$640M avg annual mktg × 7yr × 100% brand recognition. Booking.com is global #1 OTA | |
| Supplier Network (28M+ listings) | — | EST | CAC proxy: $100-150 per listing × 28M = $3-4B. Conservative est. | |
| Technology Platform | — | EST | IT spend ~$770M/yr × 3yr = $2.3B, discounted for replication efficiency | |
| Customer Data / Behavioral Intelligence | — | EST | Billions of searches, bookings. Irreplaceable dataset. Conservative est. | |
| Other Intangible Assets (Book) | 918 | % | 459 | 50% — Amortized book intangibles, partially captured by brand/tech |
| Subtotal Intangibles (Reproduction) | 18,883 | 26,755 | ||
| Other Assets | ||||
| Deferred Tax Assets (DTA) | 0 | % | 0 | 70% — DP14. Zero book DTA in FY2025 |
| Long-Term Investments | 0 | % | 0 | 50% — Non-marketable equity (zero in FY2025) |
| Other Non-Current Assets | 2,606 | % | 1,824 | 70% — ROU assets, deferred charges, misc. |
| Subtotal Other | 2,606 | 1,824 | ||
| Total Assets (Reproduction) | 51,344 | |||
| Liabilities (100% — contractual) | ||||
| Total Current Liabilities | 16,698 | 100% | 16,698 | 100% — Contractual |
| Long-Term Debt | 16,856 | 100% | 16,856 | 100% — Contractual |
| Lease Liabilities | 557 | 100% | 557 | 100% — ASC 842 |
| Deferred Tax Liabilities | 17 | 100% | 17 | 100% — Tax obligations |
| Other Non-Current Liabilities | 714 | 100% | 714 | 100% — Contractual |
| Total Liabilities | 34,842 | |||
| Reproduction Value Calculation | ||||
| Total Assets (Reproduction) | 51,344 | |||
| (−) Total Liabilities | 34,842 | |||
| Reproduction Value ($M) | 16,502 | |||
| Diluted Shares (M) | 32.639 | |||
| Reproduction Value per Share | $505.58 | |||
Note: Reproduction Value does not capture time-to-build — replicating Booking Holdings would take 10+ years. The brand, supplier network, and behavioral data are virtually irreplicable. This is a conservative estimate.
Reproduction Value Composition
RV Total (Equity)
$16,502M
PIM Intangibles Detail ($M)
Brand Value (Booking.com)$4,500M
Supplier Network (28M+ listings)$3,000M
Technology Platform$2,000M
Customer Data / Behavioral Intelligence$1,500M
Total Intangibles PIM$11,000M
Goodwill excluded$0M
Key Decisions — RV
Goodwill (DP12)0% — rebuild from scratch
DTA Recognition (DP14)70% del book value
S&M Useful Life3 years (capitalized)
Total Liabilities−$34,842M (contractual)
Price / RV8.6×
Earnings Power Value — Sustainable Earnings Power
EPV Operations ($M)
$86,224M
NOPAT ÷ WACC
EPV Equity ($M)
$83,621M
Post financial bridge
EPV / Share
$2,562
32.64M diluted shares
Price / EPV
1.70×
Market paying implied growth premium
EPV Assumptions — Edit in Real Time
Normalized NOPAT ($M)
$7,420M
$4,000M$12,000M
GAAP $8,825M + impairment $662M − S&M growth $774M − tax @20%
WACC
8.61%
5%15%
Base: 8.61% · β 1.20, Ke 9.23%, ERP 4.23% (Damodaran Jan 2026)
Effective Tax Rate
20.0%
15%30%
Mediana ETR FY2022-2025 ≈ 20.5% (Decision #5)
No growth assumed — EPV is pure steady-state value
Bridge EPV — EBIT → Equity
EPV Build ($M)
Normalized EBIT$9,333M
× (1 − Tax Rate 20.5%)× 0.795
Normalized NOPAT$7,420M
(+) D&A (non-cash add-back)+$768M
(−) Maintenance CapEx (= D&A)−$768M
÷ WACC8.61%
EPV Operations$86,224M
(+) Excess Cash (Cash+STI − 2% Rev buffer)+$17,247M
(+) Non-Operating Assets (LT Inv)$0M
(−) Total Debt−$19,293M
(−) Lease Liabilities−$557M
EPV Equity$83,621M
EPV / Share$2,562
WACC — Componentes
Risk-Free Rate (Rf)4.15%
Beta (β)1.20
Equity Risk Premium4.23%
Ke (CAPM)9.23%
Kd after-tax4.05%
Debt Weight D/(D+E)12.0%
Peso Equity E/(D+E)88.0%
WACC Final8.61%
Item EPV: EPV assumes current earnings persist indefinitely with no additional growth. It is the "valuation floor" for a moated business. A price > EPV implies the market assigns value to future growth.
Sensitivity Table — P/EPV by NOPAT × WACC
≤ 1.5× attractive price
≤ 2.0× fair price
> 2.0× growth premium
Financial Statements — FY2020–2025
Revenue · Op. Income · Net Income ($M)
Operating Expenses — FY2025 Composition
Cash Flow by Activity ($M)
Adjusted NOPAT vs. Reported Net Income ($M)
Balance Sheet
Assets · Liabilities · Equity ($M)
Income Statement Summary — FY2020–2025 ($M)
| Item | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|
Balance Sheet — FY2020–2025 ($M)
| Item | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|
Cash Flow Statement — FY2020–2025 ($M)
| Item | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|
NOPAT Normalization — DCE Adjustments FY2025
GAAP Operating Income
$8,825M
Reportado FY2025 (10-K)
Adjusted NOPAT DCE
$7,420M
Post-normalization + tax
S&M Asset Capitalizado
$4,564M
Activo de marketing en RV
EPV Impact (÷ WACC 8.61%)
$86,224M
EPV Operaciones resultante
Bridge GAAP → Adjusted NOPAT DCE
Adjusted NOPAT DCE (post-tax)
$7,420M
S&M Capitalization
Capitalizable marketing treated as investment. Creates S&M Asset in RV and reduces NOPAT by incremental growth spend.
S&M Useful Life (years)
3 years
1 year6 years
Performance mktg: 2-3 years · Brand: 4-6 years
% Marketing that is Growth
9.4%
0%30%
YoY Δ Marketing / Revenue FY2025 = $774M / $26,917M
Total Marketing FY2025$8,186M
S&M Growth Expense$774M
S&M Asset (useful life × avg 3yr)$4,564M
NOPAT Impact (−growth, post-tax)−$619M
Non-Recurring Items
Non-recurring items excluded to normalize sustainable earnings power. Toggle to include/exclude each item.
Total Addbacks pre-tax+$662M
NOPAT Impact (post-tax @20%)+$530M
Normalized Tax Rate
Normalized ETR applied to adjusted EBIT. Historical median FY2022-2025 ≈ 20.5%.
Normalized Tax Rate
20.0%
15%30%
Reported ETR FY2025: 20.9% · 3yr Median: 20.5%
Reported ETR FY202520.9%
ETR FY202419.3%
ETR FY202321.7%
ETR FY202222.1%
Selected Tax Rate20.0%
Adjusted EBIT pre-tax$9,487M
Normalized Tax Expense−$1,897M
Note: Normalized ETR applied to adjusted EBIT (post non-recurring addbacks), not GAAP EBT which includes non-operating items.
Detailed Normalization Table — FY2025 ($M)
| Item | Importe ($M) | Fuente / Decisión |
|---|
ROIC & Invested Capital
ROIC FY2025
99.9%
NOPAT $8,358M / IC $8,370M
ROIC 3yr Avg (FY23-25)
91.5%
FY2023: 78.3% · FY2024: 96.5% · FY2025: 99.9%
WACC
8.61%
Rf 4.15% · β 1.20 · ERP 4.23%
ROIC − WACC Spread
+91.3%
Creates economic value ✓
Adjusted ROIC vs. WACC — FY2020–2025 (%)
Invested Capital — FY2025 Composition ($M)
Marginal ROIC
Marginal ROIC (1yr Δ)
113.5%
ΔNOPAT $1,877M / ΔIC $1,654M
Acc. S&M Growth CapEx 2yr
$1,370M
Accumulated growth investment
Acc. S&M Growth CapEx 3yr
$2,295M
Accumulated growth investment
Selected ROIC (IRR input)
91.5%
3yr avg FY2023-2025 for reinvestment growth
Note: Accounting ROIC elevated by negative equity (aggressive buybacks). Use 3-4yr Marginal ROIC Growth as proxy for real reinvestment returns.
Invested Capital — FY2020–2025 ($M)
| Item | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|
NOPAT Build-Up — FY2020–2025 ($M)
| Item | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|
Implied IRR — Total Shareholder Return
Total Equity Return
13.9%
Recalculado en tiempo real
Margin of Safety
+7.7%
vs. Hurdle Rate 10.0%
EV / NOPAT Actual
30.2×
Assumed exit multiple: 30×
Assumptions — Edita y ve el impacto en tiempo real
Selected ROIC
398%
50%800%
Marginal 3yr: 136% · Accounting: 99.9% · Selected: 91.5%
Organic Growth
2.00%
0%20%
Pricing + viajes digitales — Decision #17
Exit Multiple (EV/NOPAT)
20×
15×50×
Actual: 18.5× · Reversión a media — Decision #15
Sustainable Buybacks ($M)
$6,500M
$5B$20B
FY2025 reportado: $6,440M — Decision #16
Horizon (years)
5 years
310
Investment horizon
DCE Hurdle Rate
12.0%
6%18%
Decision #9 — Minimum return
Assumptions base corresponden al modelo FY2025 aprobado por el CIO.
Return Decomposition
Distribution Yield
2.88%
Organic Growth
8.00%
Reinvestment Growth
2.72%
Multiple Adjustment
−0.16%
Leverage Equity
+0.46%
Total Equity Return
19.7%
Enterprise-First Return Framework (Modigliani-Miller Lever-Up)
Enterprise Value Build
Market Cap$142,394M
(+) Total Debt$19,293M
(+) Lease Liabilities$557M
(−) Cash & STI−$17,785M
Enterprise Value$144,459M
EV / NOPAT Multiple19.5×
Distributions ($M)
Dividends Paid (FY2025)$1,248M
Sustainable Buybacks (DP16)$6,500M
Interest Expense (pre-tax)$1,617M
Total Distributions$9,365M
Distribution Yield (Dist/EV)6.48%
Payout Rate (Dist/NOPAT)126.2%
Reinvestment ($M)
Growth CapEx (CapEx − D&A)$0M
Δ Working Capital (est.)$0M
S&M Growth Expense$774M
R&D Growth (N/A)$0M
Total Reinvestment$774M
Reinvestment Rate10.4%
Growth Decomposition
Selected ROIC (3yr avg)91.5%
× Reinvestment Rate10.4%
= Reinvestment Growth9.5%
(+) Organic Growth (DP17)1.5%
Total Growth11.0%
Cash Sanity Check
Normalized NOPAT$7,420M
(−) Total Reinvestment−$774M
(−) Total Distributions−$9,365M
NOPAT − Reinv. − Dist.−$2,719M
% of NOPAT−36.6%
Note: Distributing more than earning — funded by $17.2B cash pile. Sustainable for ~6 years at current rates.
Health Check — FY2025 · 17 PASS · 1 FAIL · 1 MONITOR
| Metric | Value | Threshold | Status |
|---|---|---|---|
| Financial Strength | |||
| Debt / Equity | N/A | <2.0× | ≈ Negative Equity |
| Cobertura de Intereses | 5.46× | >3.0× | ✓ PASS |
| Current Ratio | 1.33× | >1.0× | ✓ PASS |
| Net Debt / EBITDA | 0.22× | <3.0× | ✓ PASS |
| Debt / Total Assets | 64.0% | <60% | ✗ FAIL |
| Profitability | |||
| Operating Margin | 34.5% | >20% | ✓ PASS |
| Net Margin | 20.1% | >15% | ✓ PASS |
| FCF Margin | 33.8% | >15% | ✓ PASS |
| ROIC − WACC Spread | +600% | >0% | ✓ PASS |
| Metric | Value | Threshold | Status |
|---|---|---|---|
| Growth | |||
| Revenue CAGR 3yr (FY22-25) | 13.4% | >5% | ✓ PASS |
| FCF CAGR 3yr (FY22-25) | 13.7% | >5% | ✓ PASS |
| EBITDA Growth YoY | 16.0% | >5% | ✓ PASS |
| BKNG / OTA Specific | |||
| SBC % Revenue | 2.3% | <5% | ✓ PASS |
| CapEx % Revenue | 1.2% | <5% | ✓ PASS |
| Marketing % Revenue | 30.4% | <35% | ✓ PASS |
| Buyback Yield | 4.7% | >3% | ✓ PASS |
| Revenue / Employee ($K) | $1,108K | >$500K | ✓ PASS |
Perfil de Calidad por Categoría
CIO Decisions — Audit Sheet
Methodological Decisions
#1
S&M Proxy
Marketing Expenses — direct 10-K line item, performance + brand marketing.
#2
R&D Capitalization
N/A — BKNG does not report separate R&D in 10-K.
#3
S&M Useful Life
3 years — Performance marketing with moderate organic retention.
#4
SBC Treatment
SBC already in Personnel (OpEx). No additional NOPAT adjustment per DP5.
#5
Normalized Tax Rate
20% — Median ETR FY2022-FY2025 ≈ 20.5%.
#6
Normalization FY2025
Excludes Impairment $457M + Transformation $205M = $662M total non-recurring.
#7
Leases — ASC 842
Already on balance sheet. $557M lease liabilities — as-is treatment.
#8
Non-Op Assets
Excess Cash = Cash+STI ($17,785M) − 2% Revenue buffer ($538M) = $17,247M. LT Inv: $0.
Valuation Parameters
#9
Hurdle Rate
12% — Above DCE standard due to elevated beta (1.20) and cyclical OTA model.
#10
Sustainable Buybacks
$6,500M/yr — normalized FY2022-FY2025, excluding FY2023 outlier ($10,377M).
#11
WACC
8.61% — Rf 4.15%, β 1.20, ERP 4.23% (Damodaran Jan 2026), Kd 5.1% post-tax 4.05%.
#12
Selected ROIC (IRR)
3yr avg ROIC = 91.5% as reinvestment growth input. FY23: 78.3%, FY24: 96.5%, FY25: 99.9%.
#13
Goodwill in RV
0% — rebuild each component individually (Brand, Tech, Customers).
#14
DTA
70% — consistently profitable company, multi-jurisdictional complexity.
#15
Exit Multiple
20× EV/NOPAT — mean reversion; quality capital-light duopoly.
Normalization Window
FY2022–FY2025 (post-COVID). Excludes FY2020 (COVID, goodwill impairment $1,062M) and FY2021 (recovery).
FY2025 clean: excludes Impairment $457M + Transformation $205M.
FY2025 clean: excludes Impairment $457M + Transformation $205M.
CIO Notes
Investment Memo — Booking Holdings (BKNG)
DCE Holdings — Investment Office
Booking Holdings Inc. (BKNG)
NASDAQ · Consumer Discretionary · Online Travel Agency
Model date
06-Mar-2026
06-Mar-2026
Price
$4,362.70
$4,362.70
Market Cap
$142.4B
$142.4B
EV
$144.5B
$144.5B
Last review
06-Mar-2026
06-Mar-2026
Columbia Ladder
Reproduction Value / share$505.58
EPV / share (NOPAT ÷ WACC)$2,562.00
Current price$4,362.70
EPV / RV (franchise test)5.07× ✓ Moat confirmado
Price / EPV2.17× — market paying growth premium
Valuation — Implied IRR Framework
Normalized NOPAT$7,420M
WACC8.61% (β=1.20, Ke=9.23%, ERP=4.23%)
Distribution Yield6.48%
Growth orgánico1.5%
Growth por reinversión (ROIC 91.5%)9.5%
Assumed exit multiple20× EV/NOPAT (actual 18.5×)
Implied IRR (Equity)19.7%
DCE Hurdle Rate12.0%
Margin of Safety+7.7%
Business Quality
Revenue CAGR 3yr13.4%
FCF Margin FY202533.8%
Operating Margin FY202534.5%
Marginal ROIC 3yr (growth)113%
Business modelOTA capital-light · WC negativo · duopolio BKNG/EXPE
Key riskGoogle/metasearch dependency · negative equity
CIO Notes
(no notes)
DCE Holdings Investment Office · Columbia Framework Model · Internal use only · No investment verdict — CIO decision
Presentation Mode — Booking Holdings (BKNG)
$4,235
Current Price
19.7%
Implied IRR
+7.7%
Margin of Safety vs. Hurdle 12%
$2,341
EPV per Share
3.75×
EPV / RV — Moat Confirmed
1.81×
Price / EPV — Prima de Growth
Normalized NOPAT
$7,420M
FCF Margin
33.8%
Revenue CAGR 3yr
13.4%
WACC
8.61%