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I trash stocks in this weekly column, but I'm no bully. I don't slam a company unless I have three candidates that I think would make superior replacements.

Who gets tossed out this week? Come on down, (Nasdaq: PCLN  ) .

You're grounded
The "name your own price" travel portal posted mixed results yesterday. Revenue climbed nearly 27% to $584.4 million, fueled by an 88% spike in international revenue. Back out Priceline's buoyant international business, and domestic revenue inched just 6% higher. Wall Street was also hoping for $597.2 million on the top line. Too bad.

Adjusted earnings of $1.70 a share came in well ahead of the $1.09 a share Priceline earned a year ago, and the $1.66 a share that analysts were expecting. That's good, naturally, but it's well off the company's historical pace. Priceline routinely wallops Mr. Market's profit targets; you'll have to go back 15 quarters to find the last time that the dot-com darling clocked in a mere $0.04 a share ahead of the pros.

The news gets worse
Priceline's guidance for the current quarter calls for an adjusted profit of $2.50 a share to $2.70 a share, with revenue climbing 18% to 23%. Analysts expected net income of $2.83 a share on a 26% top-line spurt.

Obviously, this will be a challenging quarter for the company. Between travel cancellations as a result of Icelandic volcano ash, civil unrest in Thailand, and the euro-pounding Greek fiasco, this would never be Priceline's finest moment. However, analysts saw these negative events unfold through April and May, yet chose to ignore them in modeling Priceline's performance.

In short, this is a rude awakening for a stock that has historically traded at a sharp valuation premium to rival Expedia (Nasdaq: EXPE  ) . I won't single out Expedia as a replacement -- or Orbitz Worldwide (NYSE: OWW  ) -- because I think the stateside travel portals are in for several quarters of hurt.

Worse yet, online travel has become a cutthroat business, with portals occasionally waiving booking fees or offering low-price guarantees to win a reservation. Priceline's gross travel bookings soared a whopping 53%, yet its revenue only grew half as quickly.

I've been a fan of travel-booking sites for ages, but I don't like the way the sector looks these days. Airlines are consolidating and cutting back flights, making them less prone to rely on the online discounters to fill empty seats. Hotels don't have that luxury, but fewer flights still create fewer tourists, regardless of the markdowns.

I realize that has made a living out of managing expectations. Analysts will lower their second-quarter targets, and the portal may take advantage of that to deliver market-thumping results for its 17th quarter in a row. However, the victory will be hollow. Calamity overseas will only draw more attention to Priceline's sluggish ways closer to home.

Good news
As I do every week, I don't talk down a stock unless I have three alternatives that I believe will outperform the company getting the heave-ho.

Travelzoo (Nasdaq: TZOO  )
Unlike conventional portals, Travelzoo simply publishes sponsored travel bargains. It sends out a weekly "Top 20" email to 17.8 million willing recipients (and counting). The company's model is simple, but its moat grows with every new opt-in subscriber.

Unlike Priceline's poorly received earnings, Travelzoo enjoyed a blowout quarter during the same three months. Its profit of $0.15 a share more than doubled Wall Street's expectations. Its 24% advance on the top line may have been par for Priceline's course, but analysts only expected revenue to inch 9% higher at Travelzoo.

Analysts now predict that Travelzoo will earn $0.47 a share this year, and $0.60 a share come 2011. The stock may not seem cheap on an earnings basis, but keep in mind that Travelzoo is also presently posting operating losses from its expansion push abroad, and it can't use those shortfalls to offset domestic taxable gains.

AirMedia Group (Nasdaq: AMCN  )
If you want to play the travel industry, you may as well turn to China. A booming economy, and the wealthier new travelers it's creating, have combined for some major upside. AirMedia runs China's largest digital advertising network dedicated to air travel. It has a marketing presence in 36 Chinese airports and several carriers. It posted a small loss in last week's quarterly report, but also a 49% spike in revenue. The company should return to profitability later this year. With growth like that, it's easy to believe in this low-priced stock, which occupies the perfect niche to take advantage of China's nascent air travel industry. 

Universal Travel Group (NYSE: UTA  )
I was torn between two Chinese travel portals -- Universal Travel and eLong (Nasdaq: LONG  ) -- for the final spot. eLong definitely presents a compelling value, with half of its market cap accounted for by the $5.47 per depository share in cash on its balance sheet.

However, this morning's healthy quarterly report out of Universal Travel sealed the deal. Revenue rose a sharp 69%. Bottom-line growth was flat, but it's hard to fault quarterly earnings of $0.23 a share for a stock in single digits. The fast-growing travel booker with online and offline components is trading for just eight times this year's projected profitability, and six times next year's bottom-line target.

Sorry, You'll have to try harder to regain your wings. is a Motley Fool Stock Advisor selection. If you're into window-shopping, try any of the newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz can name his price on, but it would be lower than what the stock trades for today. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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10/21/2016 4:00 PM
PCLN $1467.39 Down -0.90 -0.06%
Priceline Group CAPS Rating: ****
AMCN $3.10 Up +0.01 +0.32%
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EXPE $127.58 Up +2.92 +2.34%
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eLong CAPS Rating: No stars
OWW.DL $0.00 Down +0.00 +0.00%
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Universal Travel G… CAPS Rating: **