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TheStreet Open House

Why Ctrip.com International (CTRP) Stock Is Skyrocketing Today

Stock quotes in this article: CTRP, PCLN

NEW YORK (TheStreet) -- Shares of Ctrip.com International Ltd.  (CTRP) are up 9.75% to $66.35 in midday trading on very heavy volume following the Shanghai-based company's announcement of the expansion of its existing commercial agreement with online travel company, Priceline Group Inc. (PCLN).

The partnership between the world's largest online travel group and China's largest online travel company will promote tourism to and from China.

Expanding the deal will allow Ctrip's customers to reach Priceline Group's global portfolio of 500,000 accommodations outside of China, and in turn, Priceline Group's customers will have access to Ctrip's 100,000 accommodations in China.

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Separately, TheStreet Ratings team rates CTRIP.COM INTL LTD as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CTRIP.COM INTL LTD (CTRP) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, disappointing return on equity and feeble growth in the company's earnings per share."

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

  • The revenue growth greatly exceeded the industry average of 0.3%. Since the same quarter one year prior, revenues rose by 36.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, CTRP's share price has jumped by 74.94%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • The gross profit margin for CTRIP.COM INTL LTD is currently very high, coming in at 72.21%. 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 7.83% compares favorably to the industry average.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 36.6% when compared to the same quarter one year ago, falling from $34.28 million to $21.74 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Internet & Catalog Retail industry and the overall market, CTRIP.COM INTL LTD's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CTRP Ratings Report
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