Still slammin it

June 24, 2011 By David Sharek

Stock (Symbol)		Stock Price
Priceline.com (PCLN)		$483
Data is as of	Expected to Report	Sector
June 24, 2011	Aug 1	Retail & Travel
Sharek’s Take
Everybody’s hatin on Priceline.com (PCLN) because its fallen a bit from its highs — during a prolonged correction. But this rocket still has fuel — a lot of it. The numbers were fantastic in last quarter’s report and this quarter they only got better. International bookings surged 79% last quarter ($3.5 bil)and U.S. bookings grew 14% ($1.3 bil). Meanwhile there’s concerns over the economy slowing (which would smack Priceline’s momentum head on) but you can’t tell from these numbers we will talk about below. PCLN continues to be a top tier growth stock. In fact, the combination of strong growth forecoming maykes me put the stock into the #1 spot. Priceline is still slammin it.
One-Year Chart
Last quarter PCLN’s P/E was 27. Now its 24. So the color goes from black (fair) to green (undervalued). Every number in this one-year chart is beautiful. You can see the dip from the highs was no biggie. Estimates of 48% and 49% profit growth the next two quarters show PCLN’s still slamin it..
Earnings Table
Profits grew 58% on a 38% increase in revenue (sales grew 35% two quarters ago). Priceline’s growing faster than 50%. Hello! World! Listen! This is really what’s going on! PCLN continues slam profit estimates like Shaq could dunk a basketball. Last quarter the company beat by 22 cents and regularly beats by double-digits.Annual Profit Estimates keep on climbin. This company should make $20 this year, $25 next year and $30 the year after. What’s not to love?Quarterly estimates are simply beathtaking. The 50% growth should continue for a while. These estimates are popping higher!
Fair Value
Since these numbers still look THAT great. PCLN deserves a 42 P/E. The upside jumps from last quarter due to a combination of the 2011 & 2012 est. rising and the stock falling.
Ten-Year Chart
Priceline’s really help mold my career. In 2008 & 2009 it finisheed the year as my top holding (and may have other years too but the records aren’t at my fingertips).Even as a bigger company, PCLN has grown profits 42-58% a year during the latest four years. Now the growth is coming from Europe — which still has growht opportunity because people there aren’t used to online travel like Americans are.
Power Ranking	Bottom Line
Growth Portfolio 1 of 21	I don’t know why they be hatin on Priceline. The stock’s still slammin it. We so serious? Kidding aside, this is one serious investment. PCLN thrusts into the top spot in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings.
Aggressive Growth Portfolio 1 of 11

Filed Under: Stock Research Tagged With: PCLN

About David Sharek

David Sharek is stock portfolio manager and CEO of DavidSharek.com. David believes a company's profits ultimately drive the price of its stock. His book The School of Hard Stocks can be found on Amazon.com and BN.com.