Stock (Symbol) |
Priceline.com (PCLN) |
Stock Price |
$1,239 |
Sector |
| Retail & Travel |
Data is as of |
| June 30, 2016 |
Expected to Report |
| Aug 3 – Aug 8 |
Company Description |
 PCLN is a provider of online travel and travel related reservation and search services. PCLN, through its online travel agent (OTA) services, connects consumers wishing to make travel reservations with providers of travel services across the world. The Company’s brands include Booking.com, KAYAK, agoda.com, rentalcars.com and OpenTable. PCLN offers consumers accommodation reservations, including hotels, bed and breakfasts, hostels, apartments, vacation rentals and other properties, through its Booking.com, priceline.com and agoda.com brands. Its priceline.com brand also offers consumers reservations for rental cars (rentalcars.com), airline tickets, vacation packages and cruises. PCLN also provides an online price comparison service from various travel Websites through KAYAK. OpenTable provides its services to consumers and reservation management services to restaurants. Source: Thomson Financial |
Sharek’s Take |
 Priceline (PCLN) continues to flatline as growth stocks take a back seat to value stocks. A year ago (2015 Q2) PCLN was selling for 21x earnings. Today the P/E is just 18. I feel the main reason for this is conservative value stocks have been rising during the past year, while growth stocks have been stagnant. That stinks because PCLN has grown profits an average of 15% during the last year, which is not bad considering its large scale. The stagnant stock action has left PCLN with solid upside of 19% and 40% to my 2016 and 2017 Fair Values. Priceline has many growing divisions, including Booking.com, OpenTable, KAYAK, Ctrip as well as HomeAway and management believes its gaining market share everywhere. The company is also buying back $3 billion in stock, which is around 5% of shares. Priceline is a core growth stock that is a good value here at 18x earnings, and I think growth stocks can take the spotlight away at anytime and make solid moves higher. |
One Year Chart |
 Last qtr PCLN had 30% profit growth on a 17% gain in sales, which were helped by the KAYAK acquisition. The company beat the 19% profit growth estimate handily. Management then lowered NxtQtr’s estimate but they always underpromise and overdeliver. Profit growth Estimates for the next 4 qtrs are: 2%, 15%, 16% and 16%. |
Fair Value |
 Notice profits have increased every year during the last decade — including the recession years of 2008 & 2009. The stock usually has a P/E of 20 to 22. I’ve owned PCLN for a decade now and can tell you the P/E is almost always too low. My Fair Value is 22x earnings, giving the stock solid upside at these levels. |
Bottom Line |
 Priceline is a large cap growth stock that’s delivering mid-teens profit growth at a time where the S&P 500 isn’t growing profits at all. Low oil prices are allowing people to travel more, giving the company wind at its sails. I feel growth stocks will soon have their day in the sun, and PCLN could be — should be — a leader in the next Bull Run. PCLN ranks 10th in the Growth Portfolio Power Rankings and 12th in the Aggressive Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
10 of 39Aggressive Growth Portfolio 12 of 16Conservative Stock Portfolio N/A |
