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Will Priceline Group (PCLN) Q1 Earnings Surprise Estimates? - Analyst Blog

The Priceline Group Inc.PCLN is slated to report first-quarter 2015 results on May 7. In the last-reported quarter, Priceline recorded a positive surprise of 3.55%. Let's see how things are shaping up for this announcement.

Factors to Consider

Priceline posted strong fourth quarter results with both the top and bottom lines exceeding the Zacks Consensus Estimate. The results were adversely impacted by currency, but bookings growth ex-currency was encouraging, reflecting the continued recovery in global travel spending.

Priceline's strong market position, compelling product lines, continued innovation and strong position in emerging international markets are expected to drive results in the soon-to-be reported quarter.

We remain optimistic about Priceline's dominance and growth prospects in the strengthening online travel agency market aided by mobile usage and metasearch. Priceline has been steadily building position in emerging international markets. It is increasing its hotel inventories, entering into strategic alliances and making acquisitions that should contribute to first-quarter results and beyond.

For the first quarter, Priceline recorded a year-over-year revenue increase of 4%-11%. Priceline expects gross profit dollars to increase 9%-16% (21%-28% on a local currency basis), with adjusted EBITDA in the range of $475 million to $510 million. Pro forma EPS is expected to come in the range of $7.20-$7.75, based on a 15% tax rate and 52.7 million shares. GAAP EPS is expected to be $5.25 to $5.80.

Earnings Whispers?

Our proven model does not conclusively show that Priceline will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Both the Most Accurate estimate and the Zacks Consensus Estimate stand at $6.94. Hence, the difference is 0.00%.

Zacks Rank: Priceline's Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes surprise prediction difficult.

We caution against stocks with Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies, which you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

  • Intuit Inc. INTU with Earnings ESP of +2.38% and a Zacks Rank #2 (Buy)
  • Cogent Communications Holdings, Inc. CCOI with Earnings ESP of +33.33% and a Zacks Rank #3
  • Hortonworks, Inc. HDP with Earnings ESP of +1.18% and a Zacks Rank #3

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PRICELINE.COM (PCLN): Free Stock Analysis Report

INTUIT INC (INTU): Free Stock Analysis Report

COGENT COMM HLD (CCOI): Free Stock Analysis Report

HORTONWORKS INC (HDP): Free Stock Analysis Report

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


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

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