Booking Holdings Inc. (BKNG) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Booking Holdings Inc. (BKNG)

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Intrinsic Value (DCF)

Current$5,193.06

→

Intrinsic$5,305.38

+2%

$3,550.51$5,305.38$8,797.53

Market implies 11% growth for 5 years

Growth 12%

Discount 10%

Terminal 3%

BKNG appears fairly valued — current price aligns with our DCF estimate.

At $5193, the market prices in 11% annual cash flow growth — a moderate expectation aligned with historical trends (12%).

Range: Bear $3551 → Bull $8798. Current price implies expectations near the base case.

Discount ↓Growth →	8%	10%	12%	14%
8%	$6552	$7139	$7768	$8443
10%	$4496	$4887	$5305	$5754
12%	$3409	$3697	$4005	$4334
14%	$2738	$2962	$3203	$3459

Bull Case

Bull case ($8798) offers 69% upside at 14% growth, 8% discount
2% margin of safety vs. base case estimate
Market-implied growth (11%) ≤ historical CAGR (12%)

Bear Case

Bear case ($3551) implies 32% downside at 10% growth, 12% discount

Intrinsic Value vs Current Price

5-Year Cash Flow Projection

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5-Year Free Cash Flow Projection

Year 1$8.83B

Year 2$9.89B

Year 3$11.06B

Year 4$12.38B

Year 5$13.86B

Terminal$219.58B

📐 Model Inputs

Growth Rate11.9%5Y CAGR (cascade: 5Y→3Y→TTM)

Discount Rate9.5%WACC estimate

Terminal Growth3.0%Perpetuity rate

Base Free Cash Flow$7.89BTTM actual

Bear g×0.8, r+2%

Base Historical CAGR

Bull g×1.2, r−1.5%

ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Frequently Asked Questions

Is BKNG stock undervalued or overvalued?

🟡 FAIRLY VALUED

BKNG trades at $5193.06, within 10% of our $5305.38 intrinsic value estimate. At 9.5% WACC and 11.9% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $3640.36 (bear) to $7687.50 (bull).

What is BKNG's intrinsic value?

Using a 5-year DCF model: Base FCF of $7.89B, projected at 11.9% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $917M net debt and dividing by 0.03B shares: Bear $3640.36 | Base $5305.38 | Bull $7687.50. Current price $5193.06 implies -1% to base case.

How is BKNG's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 11.9% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($181.64B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 23.0x.

Booking Holdings Inc. (BKNG) Intrinsic Value