Why the BKNG Selloff Isnt a Buying Opportunity (Yet)

Published on: 2026-03-06 · #stocks

Not financial advice. When I wrote this article 5 days ago, my analysis looked right, but now BKNG has recovered by 10%. Sigh

When a quality business sells off, the brain does this:

“Oh, it’s on sale.”

Sometimes that’s true, but mostly we’re wrong. This is about BKNG (Booking Holdings) and why a drawdown might not be an automatic “buy the dip” moment. The PE was hovering around 22, and while I know it’s not the ideal metric to measure business fundamentals, it looked cheap enough.

1) Price Down ≠ Risk Down

A lower price can mean:

  • future growth expectations got reset
  • the market sees macro risk you’re ignoring
  • there’s a structural shift (competition, demand, regulation) (Today’s news about the government asking AI businesses to testify changed this; that’s why the 8% pop.)

The dangerous assumption is: “Same business, cheaper.” Sometimes it’s: “Same business, different world.” For example, you can think about ADBE this way. AI in image editing can be brutal. Although ADBE is posting great returns, I think we must look a bit ahead, maybe 2–5 years.

2) Travel Is Cyclical

People love travel. They also love:

  • not getting laid off (AI is a major concern here)
  • not paying 20% on their credit card
  • not seeing recession headlines

the question becomes:

  • Is this a temporary wobble?
  • Or the start of a demand digestion period?

Also consider this: if AI is affecting white collar work, I’m pretty sure that traveling is not on top of their plans. But if the top 10% of income earners in the United States account for approximately 49% to 50% of all consumer spending, and if they aren’t that affected, we might not see much impact on BKNG’s margins.

3) Watch the Inputs, Not the Copium

If you want to “wait for the dip to finish” without pretending you can time bottoms: This is a mechanism that can be applicable for all the other stocks in the ‘dip.’

  • forward booking trends (if available)
  • cancellation rates
  • marketing intensity (are they spending more to get the same demand?)
  • take rates and margin commentary
  • FX headwinds (BKNG is global. Currency can inflate or deflate margins)

The point: see whether fundamentals are stabilizing, not just the price. In my opinion, every stock that has a dip has at least one fundamental concern. And as an investor, it’s a trade off decision one must make.

4) Competition and Distribution Risk Are Always in the Background

Online travel looks “solved” until:

  • Google decides travel is a hobby again
  • competitors buy demand with promo spend
  • suppliers push direct booking harder

BKNG has advantages, but distribution is never permanent. If big G steps up and decides, it can show ads for hotels directly through Gemini or through ‘Circle through search.’ I don’t find reasons why I’d actually go and book through booking.com. An example here is Google Flights.

So What Would Make It a Buy (Conceptually)?

For me, “not yet” becomes “maybe” when two things happen:

  1. The story has a floor (fundamentals stop deteriorating, guidance stops being a surprise) The story here is mainly how AI affects unemployment claims and payrolls data. It can be an early indicator of future headwinds.

  2. The price reflects the risk (valuation is attractive given the uncertainty, not assuming it away) I’d say that at a 20 PE, it’s a tolerable risk to stomach. Also, there’s a stock split in April. It can help scale in slowly rather than paying $4k per share.

Until then, staying on the sidelines isn’t bad. We are being diligent with our financial resources.

I’d also quote Pirates of the Caribbean:

Elizabeth: There will come a moment when you have the chance to do the right —thing— buy.

Jack Sparrow: I love those moments. I like to wave at them as they pass by.