Please ensure Javascript is enabled for purposes of website accessibility

Why Priceline Group, Inc. Stock Popped Today

By Steve Symington - Feb 17, 2016 at 11:04AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The online travel giant climbed after another solid quarter. Here's what investors need to know.

What: Shares of Priceline Group (BKNG 0.07%) were up 10.7% as of 11:00 a.m. EST Monday after the online travel specialist reported strong fourth-quarter 2015 results.

So what: Quarterly revenue rose 8.7% year over year, to $2.0 billion, driven by a 14.4% increase in agency revenue, to just more than $1.4 billion. The company reported a 6.8% decline in merchant revenue, to 445.8 million, and a 17% increase in revenue from advertising and other sources, to $153.5 million.

Gross bookings rose 12.7% year over year -- 24% on a constant-currency basis -- to $12 billion. Properties at also grew 34% year over year, to more than 850,000. That translated to 11% growth in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), to $790 million, an 11.1% increase in adjusted net income, to $641 million, and 16.4% growth in adjusted net income per share, to $12.63.

Analysts, on average, were anticipating lower revenue of $1.96 billion, and adjusted earnings of $11.80 per share.

Priceline Group CEO Darren Huston noted Priceline enjoyed accelerated 27% growth in hotel room nights booked during the quarter, to 99 million, then elaborated: "The Group's brands are starting 2016 with strong momentum. We will continue to invest in our brands to organically grow for the long term using our consistent ROI-driven investment philosophy of creating value."

Now what: For the current quarter, Priceline expects revenue will increase 9% to 16%, or to a range of roughly $2 billion to $2.13 billion, while adjusted EBITDA should be in the range of $580 million to $630 million. Adjusted net income per share should be between $9.00 and $9.60. By comparison, analysts' consensus estimates called for first-quarter revenue of $2.07 billion, and slightly higher adjusted earnings of $9.61 per share.

Similar to last quarter, however, Priceline has long demonstrated a propensity for under promising and over delivering on guidance. In the end, with shares still trading well off their 52-week-highs set in early November, Priceline investors have every right to celebrate today's solid report.

Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Priceline Group. 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Booking Holdings Stock Quote
Booking Holdings
$1,957.21 (0.07%) $1.41

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.