Priceline (PCLN) Stock Tumbles, Paris Attacks Spark Tourism Concerns
NEW YORK (TheStreet) -- Shares of travel booking site Priceline Group (PCLN) are declining by 2.82% to $1,261.12 in late afternoon trading on Monday, as many stocks within the travel and leisure sector retreat following this weekend's terrorist attacks in Paris.
Europe's STOXX 60 Travel & Leisure Index lost about 2.3 billion euros, or $2.46 billion, today, Reuters reports.
The attacks in Paris, for which the Islamic State has claimed responsibility, are the most recent in a string of international threats that could hurt global tourism.
Earlier today, a group claiming to be the Islamic State threatened to attack Washington and other countries involved in the Syrian airstrikes, according to Reuters.
Other tragedies for which the Islamic State has claimed responsibility include last month's downing of a Russian airplane in Egypt and last week's deadly bombing in Beirut.
"It's going to have an impact on travel to Paris," James Cordwell, an analyst with Atlantic Equities, told Bloomberg. "Any fears around further terrorist-related attacks is going to impact consumer demand for travel as well."
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 revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. 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:
- PCLN's revenue growth trails the industry average of 38.2%. Since the same quarter one year prior, revenues slightly increased by 9.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.64, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, PCLN has a quick ratio of 2.49, which demonstrates the ability of the company to cover short-term liquidity 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. Compared to other companies in the Internet & Catalog Retail industry and the overall market, PRICELINE GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The gross profit margin for PRICELINE GROUP INC is currently very high, coming in at 94.54%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 38.56% significantly outperformed against the industry average.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- You can view the full analysis from the report here: PCLN
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.