Priceline.com Inc (PCLN): This Stock Is Heading To $1,000 a Share and Higher

Priceline.com Inc (NASDAQ:PCLN) is trading in the low $900 range, and I believe that not only will the stock reach $1,000 a share, but also continue to appreciate from there.

One of highest quality companies in the Internet space

Priceline.com Inc (NASDAQ:PCLN) is a low cost operator with a focus on large industry profit pools and a management team with an acquisition strategy focus. That being said, it would not be unreasonable for the company to continue growing EPS in the low 20s over the next few years, and the current 17x 2014 EPS valuation does not reflect the growth potential that is still to be realized.

Booking.com strength in Europe

This acquisition (in 2012) has given the company exposure to the largest European traveler base and an inventory of the largest amount of hotels worldwide with 320,000. A Morgan Stanley survey showed that 47% of European online travel agency bookings were done via Booking.com, followed by Expedia Inc (NASDAQ:EXPE) with a 21% share.

The survey also found that the predominant response on why hotel owners utilize Booking.com more than other online travel agencies is the ease of use and access to the much larger customer base. Booking.com also offers users the convenience of paying for the stay upon arrival as opposed to competitors that charge at the time of booking and a price guarantee should the user find a lower rate for the same property at a later date.

Also revealed in the survey is the fact that 52% of hotels questioned expect bookings to “significantly/ somewhat” increase over the next six months compared to the same period a year ago. This is obviously a huge positive for the market leader in hotel bookings.

Ramping up advertising campaigns

Booking.com launched its first ever U.S. brand market campaign (entitled “Booking.yeah”) to increase market share in the domestic market. Until then, Booking.com relied solely on online advertising, particularly search engine marketing, to build awareness of its product among U.S. travelers.

At the same time, Priceline.com Inc (NASDAQ:PCLN) launched an offline marketing campaign revolving around its “Express Deals” as opposed to its “Name Your Own Price.” This campaign is a positive step and as a result, Booking.com should see some acceleration in U.S. bookings during the second half of 2013 and improve its margin profile.

Can’t afford Priceline.com shares?

Priceline.com Inc (NASDAQ:PCLN)’s competitor Expedia Inc (NASDAQ:EXPE) is a cheaper alternative for investors that want exposure to the online travel agency segment. Even though Priceline.com Inc (NASDAQ:PCLN) is substantially larger, Expedia.com shares are up roughly the same 45% that Priceline.com Inc (NASDAQ:PCLN) shares have grown year to date.