Like most travel stocks , Booking Holdings (NASDAQ:BKNG) was hit hard by the pandemic. Still, the owner of Booking.com, Priceline, and other online travel sites has seen its stock reach all-time highs in the recovery. Nonetheless, revenue and profits are still below pre-pandemic levels.

In this episode of "Beat and Raise" recorded on Nov. 4, Fool contributors Jeremy Bowman and Jason Hall break down Booking's third-quarter earnings report, and discuss trends to watch in the travel sector.

Jeremy Bowman: Booking Holdings. This is the company that was formerly known as Priceline.

Jason Hall: I still think of it as Priceline, I really do.

Bowman: Yeah. Priceline's are best known brand in the US, I think.

Hall: Right.

Bowman: But they renamed the company after booking.com, which is really strong in Europe.

Hall: Right, a huge business.

Bowman: Yeah, exactly. That's their main driver of business there. They have six brands, this is an online travel agency, its the world's biggest online travel agency. Booking.com, Priceline, Kayak, OpenTable, Agoda, which is like an Asia focused.

Hall: Hey, Jeremy. If you don't mind, can you hit that "Present" button, make this a little bit bigger for our viewers.

Bowman: Yes.

Hall: Just to left of the Go button. There you go, perfect.

Bowman: Cool, thanks.

Hall: Awesome.

Bowman: All right. Yeah [laughs]. Then Agoda, which is the Asia-focused business, and rentalcars.com. Obviously, like most travel companies, their revenue tumbled in the quarter a year ago down 50 percent with COVID. I think one of the most important things to understand with Booking, is that there's two kinds of models with online travel agencies. There's the agency model which is where hotels list with you and you take a commission of their bookings. That's what most of Booking's revenue comes from. Then there's a merchant model which Expedia tends to favor, which basically the OTA, the online travel agency buys the block of rooms and then resells them. That's a little more risky and tends to be a lower-margin business.

So, third-quarter results. Revenue up 77 percent to $4.68 billion. That was well ahead of $4.3 billion estimates. It was still down seven percent from the third quarter in 2019. Business is close to pre-pandemic levels but still hasn't quite recovered. Earnings-per-share has tripled from a year ago to $37.70. That was well ahead of the consensus at $30.90. But it's still down once again from two years ago $45. 36. The company didn't give specific guidance, but they did say that revenue would decline more against 2019 in the fourth quarter. This was for technical reasons. There's the peak season in Europe, there's the third quarter, so they're rolling off that. Then they are finding that the booking windows, as things start to reopen people were booking trips in the next week or in a few days out. As that extends the revenue is getting pushed out to a later date.

I believe the stock was up about two percent today last time I looked. I think something to be aware of here is, we have the chart. This is the last five-year chart. It's actually underperforming. Historically this is a great stock, but it's underperformed in the last five years and it's been lagging the S&P this year as well. The competitive landscape's changing. In travel as we know, there's the rise of Airbnb in home-sharing. Booking does a lot of apartment rentals through its site, but it doesn't have its own brand. Obviously, there's Airbnb, there's Expedia, has Vrbo, there's some other ones out there. Tripadvisor is just getting into it. Historically they've had great margins. They're the industry leader based on gross bookings. But I think this company for me is a bit of a question mark as far as what it's going to look like post-pandemic. I think there's going to be more remote work, less business travel. There's the home-sharing thing. I'd like to see how the next few quarters go for them and we'll see from there.

Hall: Yeah. Just thinking about the bigger trends. I think you hit on it really well right there at the end. The bottom line is, how much is its fundamentally most important business of hotels? That's the one that's at risk of being disrupted by the Airbnb shift. When your most important customers are dealing with potential disruption, that's a really important thing to monitor. How does it affect the thesis for this business? They're still a major leader in this booking and they're going to be for a long time. But how much of that market is just going to be ceded to Airbnb?

Bowman: Totally, yeah. It reminds me a bit of that, "Your margin is my opportunity." Whereas they have a huge business, they are the industry leader, but that also makes them vulnerable to disruption, I think.

Hall: Yeah, I think you're right. The economics are still really good as we see here. Definitely want to just to pay a little more attention as the trends change to see how it affects their business.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.