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TheStreet Open House

Ctrip.com International (CTRP) Falls Friday as Qunar (QUNR) Rises

Stocks in this article: CTRP

NEW YORK (TheStreet) -- Chinese travel company Ctrip.com International (CTRP) took a major hit on Friday as its competitor, Qunar (QUNR), jumped to all-time high.

CTRP dropped nearly 8% on Friday to slightly more than $45 a share, while QUNR climbed more than 10% to nearly $30 a share. The company's New Year's sales event was, according to a press release from the company, a great success, as customers booked more than 60,000 flights in the 24-hour period during the holiday.

Ctrip said in late December that it had seen an increase in the download rate of its mobile apps, but Qunar's press release cited an analyst report to note that Qunar had "become the most popular ticket-booking app in China." The company also bolstered that with a survey, which reported that 63.6% of participants named Qunar as "the most frequently used ticket-booking app for air-ticket bookings, train-ticket bookings and tourist attraction-related bookings." The company also reported that 50% of its total hotel bookings went through its mobile app and that its mobile taxi-booking app, Cheche, is now in 42 Chinese cities.

Qunar priced its IPO at $15 a share and raised $167 million in its October IPO. As of Friday, the stock traded at nearly $30 a share.

TheStreet Ratings team rates CTRIP.COM INTL LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate CTRIP.COM INTL LTD (CTRP) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, expanding profit margins and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 34.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although CTRP's debt-to-equity ratio of 0.21 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.48, which illustrates the ability to avoid short-term cash problems.
  • Powered by its strong earnings growth of 81.81% and other important driving factors, this stock has surged by 123.33% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CTRP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for CTRIP.COM INTL LTD is currently very high, coming in at 75.40%. Regardless of CTRP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CTRP's net profit margin of 24.20% significantly outperformed against the industry.
  • CTRIP.COM INTL LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CTRIP.COM INTL LTD reported lower earnings of $0.80 versus $1.13 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.80).

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