Booking Holdings (BKNG  ) shares opened higher following the company's Q1 earnings results which came in above analysts' expectations on the top and bottom line and issued positive commentary about a strong summer travel season. However, shares gave up these gains as travel stocks and Internet stocks sold off due to a weak market environment.

Record strength in bookings has been a consistent theme of earnings reports and commentary from management on conference calls. Even with inflation and higher prices, consumer demand is relentless after nearly 2 years of pent-up demand for travel is unleashed.

Given this strong catalyst, Booking's recent stock price performance is certainly perplexing as the stock is down about 25% from its highs in February and is essentially back to late-2020 levels. In fact, the stock is basically flat over the last 5 years, although the company's revenue and free cash flow are about 20% and 10% higher, respectively.

Inside the Numbers

In Q1, Booking Holdings reported adjusted earnings per share of $3.90 which was above analysts' expectations of $0.85 per share. It was also better than last year's loss of $5.26 per share. Revenue reached $2.7 billion from $1.4 billion last year and was above expectations of $2.5 billion.

The company didn't issue guidance for the next quarter or full-year but investors should be encouraged by its comments from CEO Glenn Fogel that "Despite an uncertain macroeconomic environment, we have seen a continued strengthening of global travel trends so far in the second quarter of 2022, and we are preparing for a busy summer travel season ahead."

In terms of its segments, the strongest gainers were airlines and rental cars which ad 69% and 53% growth, respectively. The total number of booked rooms reached 198 million nights for the quarter, nearly double last year.

Agency revenues were up 102% and reached $1.45 billion, while Merchant revenues came in at $1.1 billion, up 182% increase. Ad revenue nearly tripled to $195 million.

Forward-looking indicators are also bullish for the company as bookings for Q3 are also at record levels. Overall, the industry is seeing travel volumes that are 15% above pre-pandemic levels. And, there is improvement in international and business travel as well. Another positive is that international markets didn't show too much of a negative impact from the war in Ukraine.

Overall, shares look attractive given this catalyst and its attractive valuation with a forward P/E of 15.