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Why Priceline.com (PCLN) Is Up In After-Hours Trading

NEW YORK (TheStreet) -- Priceline.com (PCLN - Get Report) was gaining 0.4% to $1,287.65 in after-hours trading Thursday after the company reported fourth-quarter results beat analyst estimates.

The company reported earnings of $8.85 a share for the fourth-quarter, beating analysts' estimates of $8.29 a share. Revenue rose to $1.54 billion from $1.9 billion in the year-ago quarter. Analysts surveyed by Thomson Reuters expected revenue of $1.52 billion.

For the first-quarter, Priceline.com expects earnings of between $6.35 and $6.85 a share, and a revenue increase of 15% to 25%. Analysts expect earnings of $7.21 and revenue growth of 27% in the quarter.

"The Priceline Group finished 2013 with a strong 4th quarter, reporting accelerating hotel, rental car and airline ticket unit growth," president and CEO Darren Huston said in a press release. Room reservations grew by 37% for the year, compared to 40% in 2012, which reflects "only modest deceleration on a large scale business."

Must read: Sizing Up a Priceline Play

TheStreet Ratings team rates PRICELINE.COM INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate PRICELINE.COM INC (PCLN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, impressive record of earnings per share growth and compelling growth in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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 33.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 4.00, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 34.81% and other important driving factors, this stock has surged by 81.21% 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, PCLN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • PRICELINE.COM INC has improved earnings per share by 34.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PRICELINE.COM INC increased its bottom line by earning $27.71 versus $20.65 in the prior year. This year, the market expects an improvement in earnings ($41.20 versus $27.71).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Internet & Catalog Retail industry average. The net income increased by 39.6% when compared to the same quarter one year prior, rising from $596.59 million to $832.99 million.
  • You can view the full analysis from the report here: PCLN Ratings Report

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