I had a good feeling about Priceline.com
"I don't have a problem going out on a limb right now," I wrote four hours before the company's third-quarter report. "Shares of Priceline are trading at nearly a third of their 52-week high and stand at just eight times next year's projected profitability. Before you start thinking Wall Street is overly optimistic, consider that Priceline has blown past analyst profit targets for nine consecutive quarters. That is favorable momentum heading into tonight's report, from a company with an insanely cheap valuation."
Well, last night makes it 10 straight quarters of thumping the pros. Pro forma profits soared 51% to $2.39 a share, well ahead of the $2.10 a share the market was expecting. Revenue clocked in at $561.6 million, 35% higher than last year.
If consumers are traveling less in this climate, it only means that they are turning to Priceline in greater numbers. Gross travel bookings skyrocketed 47% during the period. Good luck finding that kind of spurt elsewhere.
"Yes, it's a difficult environment, but that's everyone's news," Expedia
Apparently it's not "everyone's news," Diller.
Priceline is growing so quickly that it rivals the high-octane spurts of Chinese leader Ctrip.com
The real shock is that analysts still don't get it, as the company continues to predictably topple the predictable.
|
EPS |
Est. |
Difference |
|
|---|---|---|---|
|
Q4 2007 |
$0.96 |
$0.84 |
14.3% |
|
Q1 2008 |
$0.76 |
$0.60 |
26.7% |
|
Q2 2008 |
$1.55 |
$1.41 |
9.9% |
|
Q3 2008 |
$2.39 |
$2.10 |
13.8% |
Source: Earnings.com.
Priceline is cautious about the near term, projecting smaller gains. Then again, Wall Street has a habit of chomping at the lowball bait, only to wonder why Priceline has exceeded its expectations again.
Given Priceline's momentum, industry-leading performance, and attractive valuation, it would be nuts to bet against the company right now.
Other ways to fly higher:
