Shares of online travel booking giant Booking Holdings (BKNG 2.13%) were up 8% today as of 12:50 p.m. EST. The stock, like others that rely on vacation activity and business travel, has been whipsawed by news of the rapid spread of the omicron coronavirus variant. Fear has mounted that another wave of the pandemic could lead to travel restrictions, which would put a damper on broader economic recovery.
However, upbeat news over the weekend from medical advisor Dr. Anthony Fauci is the likely reason for the recent uptick in Booking Holdings. Fauci and other health officials said early research indicates omicron might be less severe than the delta variant, although it's still too soon to tell for certain.
This is a potentially positive update for Booking. It has been stuck in mostly sideways action for the majority of 2021 as the travel industry recovers in fits and starts while waves of the pandemic ebb and flow around the globe.
Nevertheless, the online travel finder and trip planner made new all-time highs in recent months, only to be knocked back down as of late. Booking Holdings is down nearly 20% from those peaks, and is now up a meager 2% so far in 2021.
It's been a wild year for the parent organization of Booking.com, Priceline, Kayak, and other travel sites, but the travel company is actually doing quite well in spite of pandemic disruption. Revenue through the first nine months of this year rebounded 44% year over year to $7.98 billion, generating net income of $547 million. Cash, equivalents, and short-term investments totaled $12.2 billion at the end of September 2021.
That has helped Booking return to its historically acquisitive ways. Just recently, the company announced it will be purchasing air travel outfit Etraveli Group and hotel room distributor Getaroom for a few billion dollars. Booking Holdings' days of high growth are over, but the leader in online travel management is doing more than just fine. The stock currently trades for 55 times trailing-12-month free cash flow, implying the outlook is for this mega-cap business to continue to recover in the years ahead.