Booking (BKNG) or Airbnb (ABNB): who keeps the cash?

2026-10-08 · By Lubin Danilo, founder of Lubin Investment

Analyze a stock on Lubin Investment

Booking keeps its cash better: over four years it cut its share count by 21% while Airbnb's did not move, and stock pay eats 7% of its free cash versus 35%. Booking trades at 14 times free cash flow, Airbnb at 30: my model sees Booking as cheap and Airbnb as already expensive.

Two ways of selling the same trip

Booking and Airbnb live off the same idea: connect a traveler with a host, then take a commission on each booking. Neither owns the rooms. Booking (Booking.com, Priceline, KAYAK, OpenTable) mostly aggregates hotels and professional rentals. Airbnb was built on private homes. Since they have almost nothing to build or maintain, they invest very little and turn a large share of sales into free cash flow, meaning the money left once every bill and investment is paid.

I ran both through my grid of ten financial criteria (profitability, growth, debt, how well profit turns into cash, and so on). Both pass all ten. Booking also passes fifteen qualitative criteria (competitive advantage, management) that I do not yet have for Airbnb, so I only compare the ten numeric criteria here, which are the same for both.

Is the free cash flow really the shareholder's?

The table hides the most important gap. Both companies pay part of their staff in shares. It looks like money saved, but every share handed out dilutes existing shareholders. At Airbnb this pay equals 35% of free cash flow, against 7% at Booking. Airbnb's free cash flow is therefore more flattering than what it really leaves to shareholders.

You can see it in the share count. Booking bought back its stock heavily: 1,034 million shares at the end of 2021, 816 million at the end of 2025, 21% fewer (adjusted for the 25 for 1 split of April 2, 2026). Airbnb buys back too, but its buybacks only offset the shares it hands out: 616 million shares at the end of 2021, 623 million at the end of 2025. A Booking shareholder owns a growing slice of the cash, an Airbnb shareholder the same slice.

Return on invested capital says the same thing from another angle. For each dollar tied up in the business, Booking produces about $1.42 of cash a year, because it needs so little capital. Airbnb, at 32%, is still excellent, far above the 15% I demand. But it is another level.

What the latest results say

Airbnb is accelerating. In its second quarter 2026 release, published in early August, it reports $3.6 billion of revenue (+17%, +13% excluding currency effects), 148.3 million nights and seats booked (+10%) and $1.25 billion of free cash flow (+30%, a 35% margin). First-time bookers grew 11%, the fastest pace in four years, and management raised its full-year revenue growth outlook to at least mid-teens.

Booking is slowing, but from a higher base. Its second quarter 2026 release of August 4 shows $51.0 billion of gross bookings (+9%), $7.4 billion of revenue (+8%), 325 million room nights (+5%) and adjusted earnings per share of $2.54 (+15%). It bought back $3.7 billion of its own stock in a single quarter and raised its cost savings target to about $650 million, to be reached by the end of 2027. Incidentally, the 25 for 1 split explains why the stock trades near $156 instead of nearly $4,000: it changes nothing about the value of the company, only the number of slices.

That is the tension. Airbnb sells more each quarter but keeps less cash per share. Booking sells more slowly but turns each point of growth into more cash for the shareholder.

And at today's price?

To judge price I use P/FCF: the share price divided by free cash flow per share, meaning the number of years of cash you are buying. Booking trades at 14 times free cash flow, one of its lowest levels in recent history. Airbnb is at 30. That price assumes today's acceleration lasts: the press relayed on October 5 comments from its chief executive Brian Chesky that traffic coming from ChatGPT converts better than Google's. It is a bet on artificial intelligence as much as an analysis.

The market fears the opposite for Booking, whose sales now grow only 8%: a tired winner that AI assistants will bypass. I think the fear is partly founded on growth and exaggerated on price. But the 80% discount my model shows needs to be relativized: it assumes free cash flow per share rising from $10.9 to $25.6 in five years, about 19% a year, well above today's 8% sales growth (buybacks add a few points, but not enough). That is my calculation, not a fact. Even cut in half, Booking stays reasonably valued where Airbnb does not.

My verdict, without personal advice: Booking is the better of the two companies and the cheaper one, as long as you accept slower growth. Airbnb is excellent but already priced to succeed. Being able to judge a company and its price separately, in seconds, is what I wanted for any stock. You can see both full files on the Booking page and the Airbnb page, and read my methodology.

FAQ

Booking or Airbnb: which grows faster?

Airbnb. In the second quarter of 2026 its revenue grew 17% (13% excluding currency) against 8% for Booking. But Booking turns its growth into more cash per share, thanks to its buybacks and much lower stock pay.

Why does Booking stock trade near $156?

Booking did a 25 for 1 stock split on April 2, 2026. Each old share became 25, bringing the price from nearly $4,000 to about $160 without changing the value of the company.

Related reading

• Caterpillar (CAT) vs Deere (DE): two cycles, two cash flows
• Airbus (AIR) or Boeing (BA): Who Makes the Cash?
• Walmart (WMT) or Costco (COST): where does the cash go?

Analyze a stock on Lubin Investment

About the author

Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I find fundamental analysis fascinating, and it has delivered excellent results. For three years now, my performance has beaten the S&P 500. But analyzing every stock took too much time: sites with incomplete data, calculation methods and criteria never aligned with mine. And spotting the best stocks was just as time-consuming, even with my own well-defined checklist. So I put my software development background to work to build this software, base my investment strategy on its results, and share it with people who share the same passion as me. It judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).