Priceline Stock at an All-Time High: Can It Keep Rising?



Priceline’s 4Q16 earnings

The Priceline Group (PCLN) reported its 4Q16 financial results after market hours on February 27, 2017. PCLN beat analyst estimates for its revenues and earnings, driven by a strong increase of 31% year-over-year (or YoY) in room nights booked. This led to gross travel bookings growth of 26% YoY to $15.1 billion, also beating analyst consensus estimates of $14.6 billion.

Priceline reported earnings per share (or EPS) of $13.50, a 34.7% increase YoY, which beat analyst estimates of $12.85 per share. The company’s top line stood at ~$2.4 billion, a 17.5% increase YoY from $2.0 billion in 4Q15. This beat the consensus estimate of ~$2.3 billion.

However, Priceline’s earnings and revenues were better than PCLN’s own guidance issued after its 3Q16 earnings.

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Stock movement

Priceline (PCLN) stock rose ~5.6% on February 28, 2017, the day after it released its 4Q16 earnings. PCLN stock has risen 6.3% through March 2. However, the company downplayed its guidance for 1Q17, which we’ll discuss later in this series.

The prospects of Priceline gaining market share led to subdued stock prices for its competitors Expedia (EXPE) and TripAdvisor (TRIP). For their 4Q16 earnings analyses, please read Why Investors Aren’t Happy with Expedia’s 4Q16 Earnings and TripAdvisor’s 4Q16 Earnings Overview: More Pain Ahead?

Year-to-date, Priceline stock has risen 18.4%, EXPE has risen 6.0%, and TRIP has fallen 9.9%. Ctrip.com (CTRP) has also risen 19.6% in the same period. The broader market, tracked by the SPDR S&P 500 Trust ETF (SPY), has also gained 6.7% YTD.

Series overview

In this series, we’ll look at Priceline’s 4Q16 performance. We’ll analyze the key metrics trends and review the company’s guidance for 2017.

We’ll also take a look at analyst estimates for PCLN, and we’ll wrap up the series with a discussion of PCLN’s valuation multiples.


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