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

The Morgan Stanley survey has found that Expedia Inc (NASDAQ:EXPE)’s travel Preference Program (ETP) is showing encouraging signs. Under ETP, customers have the option of either paying when the client stays (agency structure) or paying upfront (merchant structure).

Under the agency structure, Expedia.com does not pay the credit card processing fees. Sixty percent of respondents expressed satisfaction with the ETP system which can lead to market share gains in Europe (46% of the hotels using Expedia.com expect to increase their usage of the site in the next 12 months).

What to avoid?

Tripadvisor Inc (NASDAQ:TRIP) is the leader in online travel research and may seem like a logical investment idea that is correlated to an increase in hotel bookings, however, this is not necessarily the case. Tripadvisor Inc (NASDAQ:TRIP) has a large audience, however, its monetization story is still in a transition phase from pop-up to a meta model.

The company is transitioning from 3-4 pop up ads per use to 1 meta click per user, which has been characterized by management as an ongoing headwind and will only reach neutrality by the end of the year. With earnings set to be released on July 24, I can’t help but recommend shareholders to stay on the sidelines in this case.

Conclusion

There is a long way to go for Priceline.com Inc (NASDAQ:PCLN) shares as the European economy improves and the company is able to leverage its scale to accelerate further growth. At a 20x 2014 estimated EPS, the shares can trade at over $1,000 a share. As a best case scenario, if the company were to trade at a higher valuation (say 22x), we can see share prices as high as $1,250, which implies a further continued upside from where we are today. Needless to say, shares are likely to breach the $1,000 a share mark, especially on strong Q2 results.

The article This Stock Is Heading To $1,000 a Share and Higher originally appeared on Fool.com and is written by Jayson Derrick.

Jayson Derrick has no position in any stocks mentioned. The Motley Fool recommends Priceline.com and TripAdvisor. The Motley Fool owns shares of Priceline.com and TripAdvisor. Jayson is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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