Priceline: Opportunity For Growth Investors


After shares fell over 7% after hours following an impressive earnings and revenue release with disappointing guidance by the Priceline Group (PCLN), growth investors have an opportunity to initiate and/or add to a position in this remarkable growth story.

PCLN put up another set of big numbers in Q2: reporting 21% Y/Y growth in profits, while EBITDA beat consensus estimates by nearly $50M. Total gross bookings were up 16.4% with strong growth across the board: merchant bookings increased 14%, room nights were up 21%, and rental car days boosted numbers by 12%. The one area of decline was the relatively small revenue source airline tickets, down 9%. Agency revenue margins remained strong and the company's profit per advertising dollar outperformed the broader industry, reflecting the strength of PCLN's competitive advantages in marketing and pricing strength. Furthermore, total properties available grew 39% year-over-year and increasingly popular vacation rental properties grew 54% year-over-year, further strengthening the company's already strong network moat.


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