What Happened:

Shares of online travel agency Booking Holdings (NASDAQ:BKNG) jumped 7.5% in the pre-market session after the company reported first-quarter results that beat analysts' revenue expectations. The company also smashed adjusted EBITDA estimates. Gross travel booking grew 10% year on year and came in ahead of consensus, highlighting the expanding demand in the tourism space post-pandemic. Other key demand indicators, including Hotel room nights, airline tickets, and rental car days sold, all beat analysts' expectations. The results were notably impressive, considering the ongoing geopolitical tension in the Middle East, which posed a headwind to demand during the quarter. However, management anticipated a more negative impact in the second quarter. 

Overall, this quarter's results were great, and shareholders should feel optimistic. After the initial pop the shares cooled down to $3,650, up 4.8% from previous close.

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What is the market telling us:

Booking's shares are somewhat volatile and over the last year have had 3 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 9 months ago, when the stock gained 11% on the news that the company reported second-quarter results that beat analysts' expectations for revenue, gross bookings and earnings per share. Operating metrics such as hotel rooms and airline ticket sales came ahead of Consensus. Unit economics also moved in the right direction. Management added some positive comments on demand trends stating that "In the second quarter, we continued to see robust leisure travel demand, which helped drive stronger than expected room nights and gross bookings results in the quarter." Overall, this was a really good quarter that should please investors, especially after the company's closest peer Expedia reported somewhat disappointing results.

Booking is up 5% since the beginning of the year, and at $3,650 per share it is trading close to its 52-week high of $3,902 from February 2024. Investors who bought $1,000 worth of Booking's shares 5 years ago would now be looking at an investment worth $2,003.

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