Priceline.com Inc (PCLN): This 90-Bagger Could Double From Current Levels

Due to an improving global economy leading to more travel, analysts expect full-year 2013 revenue to jump 27% to $6.67 billion from $5.26 billion last year.

The earnings outlook is similarly bright. For the upcoming second quarter, analysts project earnings will increase 19% to $9.35 per share from $7.85 in the same quarter last year. As a result of higher bookings, analysts expect full-year 2013 earnings will surge 24% to $38.70 per share from $31.28 in 2012.

Clearly the stock is not cheap with a trailing P/E of more than 31. Still, companies with this kind of growth outlook command and receive premium valuations.

Given the promising technical and fundamental outlook, I plan to go long the online travel booking company. As a short-term trader, I’m going to target a gain of about 10%. Longer term traders might want to hold on for more substantial returns.

Risks to consider: Projections of the stock breaking the $1,000 mark are fueled by expectations of increased consumer travel spurred by a global economic recovery. If the worldwide economy weakens — especially in Europe where Priceline.com Inc (NASDAQ:PCLN) is seeing strong growth — the stock may not meet growth expectations. However, Priceline.com Inc (NASDAQ:PCLN) has grown even in previous weak economic environments like the 2008 to 2009 recession and should continue to do so in the future.

Recommended Trade Setup:

— Buy PCLN at the market price
— Set stop-loss at $831.93, below a shelf of current support
— Set initial price target at $996.50 for a potential 8% gain

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