2-Star Stocks Poised to Plunge: priceline.com?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online travel company priceline.com (Nasdaq: PCLN  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at priceline's business and see what CAPS investors are saying about the stock right now.

Priceline facts

Headquarters (founded)

Norwalk, Conn. (1997)

Market Cap

$29.8 billion

Industry

Internet retail

Trailing-12-Month Revenue

$4.8 billion

Management

CEO Jeffery Boyd (since 2002)
CFO Daniel Finnegan (since 2009)

Return on Equity (average, past 3 years)

46.6%

Cash/Debt

$3.9 billion / $1.5 billion

Competitors

Expedia (Nasdaq: EXPE  )
Orbitz Worldwide (NYSE: OWW  )

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 24% of the 1,527 members who have rated Priceline believe the stock will underperform the S&P 500 going forward.

Earlier this week, one of those bears, fellow Fool John Divine (TMFDivine), succinctly summed up the underperform case for our community:

There's a chance my call could be premature with this one, but in the long term, I don't see this company maintaining any competitive advantage. Too easy for competitors to spring up, and Kayak has already shown itself to be the first of the "meta-aggregators." Why go to an aggregator when you can go to a meta-aggregator? I think growth will fall off a cliff in a few short years, and when it does, this stock is toast.

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Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool owns shares of Priceline. Motley Fool newsletter services recommend Priceline. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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