Priceline.com
(
PCLN
) is close to reporting earnings and could continue its streak of
positive earnings surprises. The stock is a Zacks #1 Rank (Strong
Buy).
Company Description
Priceline.com operates as an online travel company. The company
provides price-disclosed hotel reservation services on a worldwide
basis with approximately 185,000 hotels in 160 countries primarily
under the Booking.com, priceline.com, and Agoda brand names. It
also provides price-disclosed rental car reservation services in
approximately 4,000 locations worldwide through rentalcars.com . It
offers retail airline tickets, hotel room reservation, and rental
car services through its Name Your Own Price demand- collection
system, as well as vacation packages consisting of airfare, hotel,
and rental car components. Priceline was founded in 1997 and is
headquartered in Norwalk, Connecticut.
Priceline.com Beats in Six Straight Quarters
Priceline.com has topped the Zacks Consensus Estimate in each of
the last six quarters. Over the course of those six quarters, the
company has topped the Zacks Consensus Estimate by an average of
$0.38 or 8.7%. As a result of these beats, the stock has risen on
average by $21 or 4.5% following the earnings releases.
In the September 2011 quarter, the stock rose 7.7% following a 8%
beat of the bottom line. The company reported earnings of $9.75,
$0.73 better than the Zacks Consensus Estimate and were 96% higher
than year ago levels. Revenues of $1.45 billion were $40 million
ahead of the Zacks Consensus Estimate and showed an increase of 45%
from the year ago period.
Priceline.com Most Recent Reported Earnings
On February 27, 2012 Priceline.com reported revenue of $991
million, roughly $20 million ahead of the Zacks Consensus Estimate
and up from $731 million reported in year ago quarter. In addition,
earnings per share came in at $4.91, $0.12 higher than the Zacks
Consensus Estimate of $4.79. The beat of 2.5% was the smallest of
the last six quarters and the stock moved higher by 7.2% following
the release.
Priceline.com Expected to Report Earnings
Priceline is expected to report earnings on May 9, 2012. The Zacks
Consensus Estimate is calling for revenue of $1.038 billion and EPS
of $3.63. The year ago period saw revenue of $809 million and EPS
of $2.40. Following the release last year, the stock moved lower by
3.4%.
Priceline.com is Focused on Hotel Growth
Over the last several years, Priceline.com has seen the growth of
the company coming from one major source, hotel room nights. The
chart below shows how Priceline.com has been able to increase hotel
room nights sold dramatically. It should be noted that there is a
season drop in sales from the third quarter to the fourth quarter
in a calendar year, but that substantial growth is seen in the
first quarter of the year versus the fourth quarter of the prior
year.
Valuation
The valuation picture for Priceline.com is higher than the industry
average, but that is to be expected given the consistency of
positive earnings surprises. The trailing twelve months PE of 33x
is higher than the 24x industry average, as is the 25x forward PE
compared to the 19x industry average. The price to book is probably
keeping value investors at bay with a 14x multiple compared to a
3.3x industry average.
The Chart
The price and consensus chart for Priceline.com is among the best
out there. We see a history of increasing earnings estimates and
solid gaps between the lines which indicate earnings growth. The
stock has paced the earnings estimates quite well, suggesting that
investors continue to believe that there will be higher earnings in
the future. Priceline.com is a Zacks #1 Rank (Strong Buy).
Brian Bolan is the Aggressive Growth Stock Strategist for
Zacks.com. He is also the Editor in charge of the
Zacks Home
Run Investor service
You can follow him at
on twitter
at @BBolan1
PRICELINE.COM (PCLN): Free Stock Analysis
Report
PRICELINE.COM (PCLN): Free Stock Analysis
Report
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