Does Priceline (PCLN) Deserve to Be $1,000?


Google ( GOOG ) hasn't done it. Apple ( AAPL ) never came close. Few stocks in history have ever made it there.

Yet ( PCLN ) , an online travel-booking company with a market cap of $49 billion, is on the brink of becoming a $1,000 stock.

The company reported strong second-quarter earnings Thursday evening, sending the stock up 36 points today. At $970 per share, Priceline is just a tick below its all-time high and threatening to become a $1,000 stock.

A year ago, I doubt many people would have put money on Priceline to beat Apple or Google to $1,000. What's more amazing is that even at such a lofty share price, the stock is trading at less than 34 times trailing earnings. That's not necessarily cheap. But when you consider that Facebook ( FB ) has a P/E of 174 and LinkedIn's ( LNKD ) P/E is a whopping 895.

That said … would you pay close to $1,000 for one share of an online travel company? Psychologically, Priceline may be entering dangerous territory. There's a reason not many stocks make it to $1,000 a share. You can buy either 26 shares of Facebook, 11 shares of Exxon (XOM) or 31 shares of Microsoft (MSFT) with $1,000.

We'll see if Priceline makes it to four figures. If it does, don't expect it to stay there for long.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: AAPL , FB , GOOG , LNKD , PCLN

Wyatt Investment Research

Wyatt Investment Research

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