Priceline.com Inc. Stock Buy Recommendation Reiterated (PCLN)

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 ( TheStreet) -- Priceline.com (Nasdaq: PCLN) 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 solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. 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:
  • Powered by its strong earnings growth of 27.15% and other important driving factors, this stock has surged by 30.51% 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 27.1% 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 ($31.02 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 27.1% when compared to the same quarter one year prior, rising from $469.50 million to $596.59 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 22.9%. Since the same quarter one year prior, revenues rose by 17.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.38, 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 3.50, which clearly demonstrates the ability to cover short-term cash needs.

priceline.com Incorporated, together with its subsidiaries, operates as an online travel company. Priceline.com has a market cap of $35.07 billion and is part of the services sector and leisure industry. The company has a P/E ratio of 26.6, above the S&P 500 P/E ratio of 17.7. Shares are up 13.4% year to date as of the close of trading on Wednesday.

You can view the full Priceline.com Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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