Priceline.com Inc (PCLN), Expedia Inc (EXPE): Is Priceline Worth the Price?

Page 2 of 2

Valuations and Metrics

Priceline.com Inc (NASDAQ:PCLN) is the cheapest of the stocks mentioned here looking at price-to-earnings ratio, with a P/E of 32.33 times trailing earnings versus Expedia Inc (NASDAQ:EXPE)’s 48.75 and Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP)’s 52.43. Moreover, the forward P/E is quite reasonable at 19.73. On the other hand, the price-to-book of 11.62 is very high. The stock’s return on equity of 42.74 is way ahead of the industry average, as is the operating margin of 34.8%. Finally, the firm has a fairly strong balance sheet, with $1.46 billion in debt and $5.18 billion in cash.

The Bottom Line

Priceline.com Inc (NASDAQ:PCLN) appears to be one of the fastest growing travel companies at the moment, and has shown its ability to steadily grow earnings and revenue each year. With another big beat, and encouraging guidance, this performance should continue for the foreseeable future. Additionally, the company is cheaper than its main rivals, all of which makes the stock a solid bet for investors looking to profit from the growing online travel industry.

Daniel James has no position in any stocks mentioned. The Motley Fool recommends Ctrip.com International and Priceline.com. The Motley Fool owns shares of Ctrip.com International and Priceline.com. 

The article Is Priceline Worth the Price? originally appeared on Fool.com and is written by Daniel James

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2