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Ctrip.com (CTRP) Flies on Tuesday

NEW YORK (TheStreet) -- Shanghai-based online travel agent Ctrip.com (CTRP) was climbing on Tuesday, adding to gains achieved since last Thursday.

By late afternoon, shares had climbed 10.2% to $50.48. Trading volume of 7.3 million had exceeded its three-month daily average of 6.5 million.

Since Thursday, the stock has gained 29.9% after reporting fourth-quarter earnings that beat analyst estimates.

In the three months to December, the travel site recorded per-share earnings of 28 cents, a nickel higher than what analysts surveyed by Thomson Reuters had expected. Revenue of $237.94 million was 31% higher than a year earlier and beat estimates by $8 million.

Over fiscal 2013, the company generated earnings of $1.10 a share, six cents higher than consensus, and revenue of $889.83 million which beat by $12.6 million.

Also See: Ctrip.com (CTRP) Reports Better-Than-Expected Fourth Quarter

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

"We rate CTRIP.COM INTL LTD (CTRP) a BUY. This is driven by several positive factors, 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, solid stock price performance, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and growth in earnings per share. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

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

  • The revenue growth came in higher than the industry average of 15.4%. Since the same quarter one year prior, revenues rose by 35.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 118.06% over the past year, a rise that has exceeded that of the S&P 500 Index. 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 72.70%. 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 18.11% significantly outperformed against the industry.
  • CTRP's debt-to-equity ratio of 0.75 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CTRP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.05 is high and demonstrates strong liquidity.
  • CTRIP.COM INTL LTD's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, CTRIP.COM INTL LTD increased its bottom line by earning $1.10 versus $0.80 in the prior year. For the next year, the market is expecting a contraction of 9.3% in earnings ($1.00 versus $1.10).

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