Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
- PRICELINE.COM INC has improved earnings per share by 37.0% 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 $20.65 versus $10.39 in the prior year. This year, the market expects an improvement in earnings ($30.20 versus $20.65).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 37.4% when compared to the same quarter one year prior, rising from $256.37 million to $352.35 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 24.3%. Since the same quarter one year prior, revenues rose by 20.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, PRICELINE.COM INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
priceline.com Incorporated, together with its subsidiaries, operates as an online travel company. The company has a P/E ratio of 24.4, above the average leisure industry P/E ratio of 23.4 and above the S&P 500 P/E ratio of 17.7. Priceline.com has a market cap of $28.02 billion and is part of the
industry. Shares are up 26.4% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.