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TheStreet Open House

Will Priceline Group (PCLN) Stock Be Helped By This New Coverage Today?

NEW YORK (TheStreet) -- Priceline Group (PCLN) shares had coverage initiated with a "buy" rating and $1600 price target by analysts at Stifel Nicolaus  (SF) on Wednesday.

The new price target represents a 22.7% upside from the company's opening price today.

Priceline Group shares are down -0.5% to 1,288.15 in early market trading despite the positive ratings however due to the company reporting second quarter room-night growth that slowed to 29% from 32%. This is the second consecutive quarter growth has slowed for the travel booking company.

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

"We rate PRICELINE GROUP 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, notable return on equity, expanding profit margins and good cash flow from operations. 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 7.7%. Since the same quarter one year prior, revenues rose by 26.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although PCLN's debt-to-equity ratio of 0.23 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 5.32, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Internet & Catalog Retail industry and the overall market, PRICELINE GROUP INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for PRICELINE GROUP INC is currently very high, coming in at 88.67%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.14% significantly outperformed against the industry average.
  • Net operating cash flow has increased to $689.98 million or 16.27% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.15%.
  • You can view the full analysis from the report here: PCLN Ratings Report
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