Priceline.com Inc.'s Buy Recommendation Supported

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.1%. Since the same quarter one year prior, revenues rose by 33.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.35, 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 4.00, which clearly demonstrates the ability to cover short-term cash needs.
  • Powered by its strong earnings growth of 34.81% and other important driving factors, this stock has surged by 61.18% 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 34.8% 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 $27.71 versus $20.65 in the prior year. This year, the market expects an improvement in earnings ($40.21 versus $27.71).
  • The gross profit margin for PRICELINE.COM INC is currently very high, coming in at 87.63%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.69% significantly outperformed against the industry average.

priceline.com Incorporated operates as a online travel company. Priceline.com has a market cap of $52.7 billion and is part of the services sector and diversified services industry. Shares are up 64.9% year to date as of the close of trading on Friday.

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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