Priceline.com Inc (PCLN): The Best of the Best

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Priceline.com Inc (NASDAQ:PCLN)‘s stock continues to challenge bearish views and stay close to the $800 level. Many pessimistic investors have repeatedly asked why or how this company has continuously reached new highs. The answer lies within the question; it’s because Priceline has become the number-one vacation provider for traveling.
Priceline.com Inc (NASDAQ:PCLN)
Priceline.com Inc (NASDAQ:PCLN) has tons of potential to grow because it does about 70% of its revenue abroad. Fundamentally, Priceline has never looked better with a P/E of 28 and a 34% operating margin; Priceline also has about $103 per share in cash. Another factor to consider is the fact that it has beaten earnings estimates for 12 straight quarters.
International affairs
Priceline.com Inc (NASDAQ:PCLN) dictates the international online-travel marketplace with its booking.com and agoda.com brands. Many investors were worried that the European and Greek-specific crises would affect Priceline’s earnings, but that didn’t happened. Bookings in Europe have been rather consistent, and considering that only 25% of the European hotel market is online, there’s plenty of room for growth. Priceline has less than 10% of its total hotel bookings in Europe. There’s considerable room for growth in Europe. There is also considerable potential in Asia, the Middle East, and Africa.
Priceline.com Inc (NASDAQ:PCLN) is looking to build up its existence in the U.S. market. Priceline is planning on rolling out an advertising blitz to increase the presence of its booking.com brand in the U.S. This would lower margins to some extent in the next few quarters, but will increase the site’s presence in the large U.S. market and deliver phenomenal growth down the road.
Competitors
Analogous to Priceline, Expedia Inc (NASDAQ:EXPE) has had a phenomenal start for 2013. Expedia is taking a smart strategic route to continue its growth. Expedia still dominates most of the U.S travel market as it has a 43% market share compared to Priceline’s 11%.
Priceline.com Inc (NASDAQ:PCLN)’s competitors have also started to penetrate its margins. Currently, Priceline has margins of approximately 34%. Analogous to Priceline, Expedia also has a horde of cash on its balance sheet; currently more than $2 billion.
Expedia Inc (NASDAQ:EXPE) has had its losses. It reported a loss of $0.24 on April 25. Because of these results, analysts have decided to tremendously lower estimates; one notable analyst firm is Zacks, going from $3.03/share to $2.58/share
Orbitz Worldwide, Inc. (NYSE:OWW is also having a phenomenal start for 2013 with accelerating growth. These companies continue to invest in three key areas: mobile, loyalty, and international markets. Orbitz rolled out its Orbitz.com Rewards Loyalty program in the first quarter and enhanced its HotelClub initiative with expanded support for more currencies and foreign languages to allow it to expand further into the international market.
Orbitz Worldwide, Inc. (NYSE:OWW) has a relatively high valuation, currently trading at 26 times forward earnings. This is more than both Priceline.com Inc (NASDAQ:PCLN) and Expedia. Orbitz has also proved to be the weakest company of the three because it has gone back and forth between making and losing money. Both Priceline and Expedia have been firmly profitable.
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