In this life, you’ve always got to keep an eye out for that second arrow.

There’s a Buddhist parable that compares the unexpected things that happen to us to an arrow streaking through the air.

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There’s not much we can do about the first one, the parable says, “but we can control how we respond to the second arrow, which is fueled by our reaction and judgement.”

Glenn Fogel has seen more than a few arrows in his career. 

The president and CEO of Booking Holdings  (BKNG) , whose subsidiaries include Kayak, Priceline.com, Cheapflights, and Bookings.com, recently shared his views on responding to whatever life throws at you.

“Our goal always is to gain share,” Fogel told analysts on Aug. 1. “Whether the market goes up or the market goes down, I can’t control demand. I can’t control economies. What I can control is how well we can provide value to the travelers and to the suppliers.

“And as long as we continue to do that, as long as we continue to provide a reason that people should come to us as a traveler or use us as a way to distribute somebody’s travel suppliers, we’ll continue to gain.”

Fogel commented during the company’s second-quarter earnings call where he said that some things were beyond his control.

Analysts are issuing research notes for Booking Holdings.

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Booking Holdings CEO: ‘There’s gonna be volatility’

“There’s gonna be volatility, there’s gonna be variations, there’s gonna be events [that] are going to happen globally, macro events that happen that can influence a quarter or a week or a day,” he said. “But in the long run, we just continue to build what we’ve been trying to build for a long time, which is a better service, and that’s how we do it.” 

The travel sector saw a whole mess of volatility in July during the CrowdStrike  (CRWD) meltdown, where a faulty update to the company’s Falcon Sensor security software sparked what has been called the largest IT outage in history.

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Fogel said the incident “didn’t affect us very much,” but he added that the outage “hit some of our supplier partners significantly.”

“It’s a problem when … critical infrastructure breaks down and then disrupts millions and millions of people’s lives,” he said. “And hopefully, it won’t happen again. Hopefully, people test their products before they put them out into the market. And hopefully, there are backups.”

For the quarter, Booking Holdings earned $44.38 a share, up 27% from the year-earlier quarter, while revenue rose 7.3% to $5.86 billion.

Fogel said the company saw travel-market growth in Europe moderate mildly, but he added that “we’re continuing to perform well relative to the market in Europe.”

And the company continues to see high growth in Asia and a slight improvement in growth in the U.S., he said.

Chief Financial Officer Ewout Steenbergen said Booking Holdings expects third-quarter room-night growth of 3% to 5%, a sequential slowing as the company expects Q3 to benefit less from a year-over-year expansion of the booking window than it saw in Q2.

“For the third quarter, we expect the booking window to be more similar to last year,” he said. The booking window is the time between a customer making a reservation and the point at which the customer arrives.

For the full year outlook, Steenbergen said the company was adjusting its expectations for growth in its gross bookings to faster than 6%, lower than its prior expectation, due to less growth in flight bookings as a result of the lower flight ticket prices.

“While flight prices have come down, we still expect strong growth in flight tickets for the year as we continue to expand the flight offerings at Booking.com and Agoda,” he said.

Analyst concerned about traffic growth

Gross travel bookings refers to the total dollar value, generally inclusive of taxes and fees, of all travel services customers book, net of cancellations. 

Investment firms have been issuing research reports on Booking Holdings, including Truist, which initiated coverage of the company on Sept. 6 with a hold rating and $4,100 price target, according to TheFly.

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Booking is the global leader in online travel and is well positioned for the secular growth of global travel, the investment firm said.

However, Truist said that decelerating leisure growth in what is now year five of the current lodging cycle drives its hold rating. 

The firm. which also initiated coverage of Expedia  (EXPE)  with a hold rating and $148 price target, attributed the rating to moderating macro travel growth and a strong stock reaction following the earnings report despite modest guidance revisions.

Cantor Fitzgerald kicked off coverage of Booking Holdings with a neutral rating and $3,590 price target. 

While the firm likes Booking’s competitive position, financial profile, and valuation in the online travel space, the analyst expresses concern about broader travel- market cyclicality, which “tempers our enthusiasm for the stock in the near term.”

And Jefferies downgraded Booking Holdings to hold from buy with a price target of $4,200, down from $4,350. 

The firm said sustainability of room-night growth is the key debate for online travel, following disappointing guidance for the second half of 2024 and softer demand in July.

Its top down industry model suggests growth will moderate further over the next three years, which causes it to take estimates below consensus. 

Jefferies said Booking’s downside to consensus is likely to outweigh its peer-leading free cash flow. 

While Booking offers peer-leading execution, the stock’s upside is capped by risk of downside to room nights, the firm said.

Jefferies said it is also concerned that a currently elevated booking window could reverse in 2025, creating a near-term headwind to room-night growth.

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