PCLN

We added a brand new 2% position to the Best Ideas portfolio today in highest-rated Economic Castle Priceline (PCLN) today. Specifically, we added 3 shares at the open price, $1,248.97.   The leader in global online hotel reservations is executing fantastically, and the firm’s valuation presents a material opportunity. Shares now register a 10 on the Valuentum Buying Index, and while we fully acknowledge the fundamental risks associated with an idea tied to cyclical end markets so late into the economic recovery, we think an adequate margin of safety exists.   The firm’s stock price is breaking through to the upside of its multi-month flagging pattern, and it now appears ripe for the picking. Investors should expect shares to be highly volatile in coming periods, … Read more

Online travel firm Priceline (click ticker for report: ) reported strong second quarter earnings Tuesday afternoon. Revenue grew 20% year-over-year to $1.3 billion, which was in-line with consensus estimates. Non-GAAP net income per share grew a whopping 43% to $7.85, which was substantially higher than the Street’s estimate of $7.39. However, Priceline’s third quarter guidance implies substantial quarter-over-quarter deterioration. Total bookings are expected to grow 10%-18% (19%-27% on a constant currency basis) on just 5% domestic booking growth. This compares to a 26.8% growth rate for gross bookings during the second quarter and implies significant headwinds abroad. Non-GAAP net income per share is expected to be $11.10 to $12.10 per share—still above its $9.95 in earnings during the third quarter of 2011 but … Read more

Priceline.com (PCLN) reported strong fourth-quarter results that showed continued momentum with respect to bookings growth. Though we will be revisiting our valuation on the online travel provider, we don’t expect to make a material change to it. The company’s revenue advanced 35.5% during the period, as international operations increased nearly 63% from last year’s quarter. During the period, fourth-quarter gross travel bookings, increased nearly 52%. Gross profit performed even better than firmwide top-line expansion, jumping over 50% in the quarter. Further, Priceline.com was able to leverage its cost structure such that operating income expansion exceeded both revenue and gross profit increases at a nearly 61% jump. The firm’s GAAP net income for the fourth quarter came in at $4.41 per … Read more

Priceline.com (PCLN) reported solid third-quarter results after the close Monday. We are maintaining our $584 per share fair value estimate. The firm’s gross travel bookings increased an impressive 56.2% from the same period a year ago, while revenue jumped 45% led by international sales expansion (which increased almost 80% in the period). The company noted that its airline ticketing business experienced its strongest quarterly growth in the last seven quarters, with sales increasing 8%. Importantly, the firm was able to leverage this tremendous sales growth into an 83% increase in operating income, a very nice showing. Non-GAAP net income jumped almost 90% from the same period a year ago, and diluted earnings per share came in at $9.95, above consensus … Read more