Can Priceline Fly Higher in 2013?

As 2013 begins, now's a good time to look at the future prospects for the stocks you own. If you don't know where a company's headed in the next year and beyond, then it's impossible to make an informed decision about whether you should add the stock to your portfolio -- or sell it if you already own it.

Today, I'll look at Priceline.com (Nasdaq: PCLN  ) . The online travel portal kept soaring in 2012, as the company not only managed to keep revenue and profit growth high but also made a big acquisition to try to cement its leadership role in the industry for the future. Below, you'll learn more about Priceline.com's prospects for 2013.

Stats on Priceline.com

 

 

Average Stock Target Price

$754.05

Full-Year 2012 EPS Estimate

$30.88

Full-Year 2013 EPS Estimate

$37.46

Full-Year 2012 Sales Growth Estimate

20.5%

Full-Year 2013 Sales Growth Estimate

19.6%

Forward P/E

17.6

Source: Yahoo Finance.

Will Priceline.com give investors the right price in 2013?
Analysts continue to be optimistic about Priceline's prospects for the future. Their current target price stands about 15% above where the stock trades now, and with earnings and revenue both set to grow at roughly a 20% clip, the expected share-price gain seems eminently reasonable.

Even after its huge share-price increase, Priceline still has a lot going for it. As much as U.S. investors look at the company's domestic presence, the big growth potential lies in international markets. In particular, Chinese tourists are hungry to see the world, and although Ctrip.com (Nasdaq: CTRP  ) has home-field advantage in serving them, Priceline has positioned itself to capture its share of that lucrative market by entering into a partnership with Ctrip to share access to its Booking.com portfolio of 235,000 hotels worldwide.

Still, Priceline won't have the industry's profit potential all to itself. Expedia (Nasdaq: EXPE  ) has made a huge comeback in recent months, with its spinoff of TripAdvisor (Nasdaq: TRIP  ) leaving the travel portal with a renewed focus on standing up to Priceline and growing its business.

The wild card in the industry is whether Google (Nasdaq: GOOG  ) will step up to enter the travel field in more dramatic fashion. Yet given the head start that Priceline has built, it's far from a sure thing that Big G would be able to make as big a dent in the online travel portal business as many analysts think.

If the world economy rebounds more strongly, then Priceline is in a perfect position to take advantage. After a nice correction, shares may be as attractively valued right now as you're likely to see.

Get the inside scoop
Priceline is just one of the big winners that Motley Fool co-founder David Gardner picked before Wall Street saw its potential. If you like revolutionary stocks with ground-breaking businesses and promising futures, accept David's invitation to see his Supernova service today. Just click here to get instant access.

Click here to add Priceline.com to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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