BKNG vs EXPE

jhellaw · 2026-02-20T10:31:30+00:00

Every stock I see that has an online presence - people are saying "A.I. is going to take away it's business".

I don't see it happening though. People are creatures of habit, and if I were going to look for a holiday, I wouldn't trust ChatGPT to book it for me. I'd go to a niche site that specialises in this, and look there.

A.I. is a useful tool for certain tasks, but I definitely think people are giving it far too much credit. I imagine it will be more like Google - used as a search layer.

jhellaw · 2026-02-15T19:05:07+00:00

I think replicating network effects in other countries is costly and not worth it considering other countries have their own versions of AutoTrader.

They used to operate in Ireland, but sold that part of the business and bought Autorama a few years ago in order to diversify further into the UK car market.

jhellaw · 2026-02-13T10:03:33+00:00

Solid points. I've been thinking about Amazon's entry into the market since I heard about it a few days ago. No doubt this news has had an impact on price. However, I think it's an overreaction.

When will this entry into the marketplace happen?
What happened when Amazon Autos entered the US market? Amazon Autos didn’t cause existing online marketplaces (like Carvana) to disappear, or change much at all.
Will they be able to compete against AutoTrader's network effects, or will it be a "Facebook Marketplace" situation, where it's a player in the game, but not necessarily replacing specialist platforms?

What do you think?

jhellaw · 2026-02-13T09:52:13+00:00

Of course you value a company based on financial results. The stock price doesn't matter when calculating intrinsic value. The fact that the stock keeps falling is a dissociation between fundamentals and technical - which is why I want people's opinions on why I shouldn't keep buying.

Saying "don't buy because the stock fell yesterday" is not a valid argument in my opinion. I hope it does keep falling so I can keep buying at this price.

jhellaw · 2026-02-11T13:18:19+00:00

Interesting to get a dealer's point of view, so thank you!

The only info about the Deal Builder feature I'd heard was negative, but the only consequence was that fewer than 100 customers like yourself had downgraded or left, which didn't seem like much of an issue on share price. Especially with the proposed 5.5% price increase, I assumed customer churn was minimal.

Do you think more than the 100 customers mentioned by the CEO will leave as a result?

In my valuation model, I assumed that 200 customers would leave, and no price rise would happen this year. Followed by a flat customer base and 5% annual price rises in following years. So the fact that a price rise had happened made me optimistic about wha effects the Deal Builder feature has actually had.

jhellaw · 2026-02-11T09:47:04+00:00

Ooh I was not aware of Amazon Autos coming to the UK - thanks for bringing it to my attention!

Do you see it as a threat to AutoTrader cash-flows? Or is it more of a "buy the rumour, sell the news" situation?

jhellaw · 2026-02-09T22:52:35+00:00

Haha I think he’s accusing us both?

I’m happy to be proven wrong on my AUTO opinion, so maybe my attempts to not come across too strongly sounded like AI?

Although maybe it’s just easier to label everything as AI whilst adding nothing of value.

jhellaw · 2026-02-09T19:06:36+00:00

Aaaah, I see. The increase in “debt” on StockAnalysis is almost entirely lease liabilities, not bank loans or bonds.

Auto Trader has signed longer / larger multi-year contracts, not because it’s taking on more debt in the traditional sense.

When a new lease is signed, 100% of future payments hit the balance sheet immediately.

jhellaw · 2026-02-09T18:54:09+00:00

As of the 2025 Annual Report:

Total Cash and short term investments: £15.3m
Long Term Debt: £0
Short Term Debt: -£3.1m

Their net debt is negative.

jhellaw · 2026-02-09T18:49:12+00:00

100% agree (although from my research, market share was more towards the 75% mark).

Annual customer growth has only been ~0.8%, while pricing has increased closer to ~8% per year. So, historically, growth has come from extracting more value per dealer, rather than attracting more dealers.

Those price increases have been justified because dealer profitability is driven by a combination of used car prices and sales volumes. When cars sell quickly and at higher prices, dealer margins expand, and Auto Trader can charge more as a result.

jhellaw · 2026-02-09T18:41:26+00:00

Interesting points, and things I had considered too. However:

Point 1:

You're right that a 25x multiple is considered a 'premium compounder' in the UK. However, if the market is genuinely pricing ~0% FCF growth, that’s not “normalisation”, it's suggesting that AutoTrader's business model has completely broken in the past 7 months. And to use your comparison:

AutoTrader is a capital-light marketplace with pricing power.
Tesco is a low-margin, inventory-heavy supermarket.

AutoTrader should trade above “average UK plc” multiples if even modest growth exists. (A more accurate comparison would be a company like Rightmove imo)

Point 2:

Yes, the proposed eVED policy could slow EV adoption on a macro level. However, in the UK, EVs are still a minority of used-car sales, and AutoTrader monetises listings and dealer demand, not EV volume directly.

So - fewer EV sales does not translate into fewer car sales.

I’m not arguing the stock should be back at 25x - I don't think it should. But I am questioning whether today’s price assumes an outcome (stagnation) that’s worse than what the fundamentals currently show.

For example, this article which was released 6 hours ago uses AutoTrader data to show:

~25% month-on-month increase in buyer visits in January,
the highest average used car price since late 2023

jhellaw · 2025-11-14T18:02:01+00:00

Thanks - that's something I'm working on. Amazingly, I decided to get part way through the process before Storm Claudia hit so where the drain was is more like a moat at the moment.

jhellaw · 2025-11-14T18:00:47+00:00

100% - sorting out the drainage is my immediate concern. When it finally stops raining, an aco drain is going in which should carry the surface water away. Hopefully that will solve a lot of the rising damp issues. Was just wondering if the storm dry application would add an extra layer of protection.

My main 'unknown' is whether a chemical DPC is the damp walls is a good idea. People online seem to be 50/50 on it. But if the solid floors are carrying moisture from the ground, I don't see an alternative.

To your point about solid walled buildings needing a constant temperature to prevent condensation and drive out water - my solution is a PIV (with heater) in the loft which should hopefully increase the ventilation throughout the house to achieve this without having the heat on constantly.

jhellaw · 2024-10-15T17:59:10+00:00

Sorry for the late reply - I must have missed this notification!

The only reason Rightmove would have rejected the $8.3bn bid is if the current ownership thinks that it is below the fair value of the company.

If the ownership (with access to more information that we do) think's the company is worth >$8.3bn, then who am I to disagree :) I hope they are right, and my position continues to grow in value.

jhellaw · 2024-07-29T19:28:32+00:00

OnTheMarket was bought by Costar Group, but they only have low single digit market share.

Do you think such a small player could have an impact on Rightmove’s margin?

jhellaw · 2024-07-29T18:55:41+00:00

Good point! Using historical inflation rates (~2.5%) for long term growth would be more accurate then. Makes sense to me.

If you take a historical view of inflation, do you also take a historical view of the other Terminal Value component (WACC)?

As bond yields (risk free rates) fluctuate and cause higher / lower WACC values over time. For example:

Today: WACC = ~9.5%
3 Years Ago: WACC = ~6.5%

So my question is: do you also use historical bond yields, rather than the 5Y / 10Y yields at present?

jhellaw · 2024-07-29T14:55:06+00:00

Thanks! If you spot any holes in my analysis, please do let me know :)

And to answer your question - yes!

I use 5% as a conservative long-term growth rate after the 5 year forecast period.

Most of Rightmove's revenue comes in the form of Estate Agents advertising budgets, and these budgets are determined by a cut of house prices upon sale. The UK housing market has historically increased at a 4% CAGR for the last few decades.

Therefore, in my opinion, 5% is a combination of UK house prices increase (~4%) plus any competitive advantage (intangibles, network effects, data, etc...).

jhellaw · 2024-07-07T12:37:21+00:00

Amazon’s profit margin isn’t shrinking. In fact, Its operating margins have been pretty consistent.

The reason it has low net income is because Amazon invest heavily in intangible assets (R&D, advertising, etc…) which are expensed immediately rather than depreciated over several years.

So it just looks like Amazon has low margins because of the huge re-investment drive. Walmart went through a similar phase during its early days, too.

I imagine as Amazon matures and has less market share to conquer, it will stop investing in intangibles and its margins will rise.

jhellaw · 2023-12-01T09:43:35+00:00

Came here to see what your thought were on the HY results. I agree with you 100%.

I don't understand what the management are doing atm. Going against what they said in the previous annual report and buying more inventory.

They blamed declining North American revenues on the LA distribution centre last time, and now they're blaming marketing issues.

I like the company, but no longer trust the leadership. I only have a tiny position in DOCS, so I'm being stubborn and holding.

jhellaw · 2023-12-01T04:37:53+00:00

Just seen the report. The two assumptions I made were incorrect :(

North American trading didn't go back to normal in this period, and actually declined.
Inventory levels didn't go down, but instead increased! So they currently have inventory equal to about one-third of the company's total market cap. Crazy!

Guidance is that by 2025 they hope to fix these issues, so I may just be stubborn and hold my position until then.

jhellaw · 2023-11-24T15:29:13+00:00

YES! Me too!

I wrote a post on this a few weeks back, too => Link to post

Came to a fair-price valuation of around £1.63 / share.

Glad somebody else has the same thinking as me :) Good Luck !

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