Priceline Group Inc (PCLN) Expected To Report Strong Q4 Earnings: Here’s What To Watch by Estimize
Priceline.com Incorporated (PCLN) Consumer Discretionary – Internet & Catalog Retail | Reports February 17, Before Market Opens
Priceline Group Inc (PCLN) Q4 Earnings – Key Takeaways
- The Estimize consensus is calling for EPS or $11.96, 13 cents higher than Wall Street, and revenue expectations of $1.987 billion, roughly $11 million higher than the Street
- Priceline has invested heavily in developing operations in China which is viewed as the fastest growing travel market in the world
- Despite currency headwinds, Priceline has delivered positive earnings surprises in the trailing four quarters.
- What are you expecting for PCLN? Get your estimate in here!
For years, online travel has been a high growth industry, but recent headwinds have come at the expense of profit growth for Priceline (PCLN) and its peers. Lately, though, the impact of stiffer competition, weaker conditions in China and currency headwinds have put Priceline under pressure. In the last 3 months, shares have fallen 18.5%, leading to a downgrade of its rating from buy to neutral.
Relying On Old-Fashioned Stock Picking, Lee Ainslie Reports His “Strongest Quarter” Ever
Lee Ainslie's Maverick Fund USA enjoyed its "strongest quarter in the fund's history" during the three months to the end of June. According to a copy of the firm's second-quarter letter to investors, which ValueWalk has been able to review, Maverick Fund USA gained 18% in the second quarter. Following this performance, the fund was Read More
Coming into Priceline’s fourth quarter earnings, investors are increasingly nervous about the company’s ability to regain its earnings potential. The Estimize consensus is calling for EPS or $11.96, 13 cents higher than Wall Street, and revenue expectations of $1.987 billion, roughly $11 million higher than the Street. Compared to Q4 2014, this represents a projected YoY increase in EPS by 11% and revenue by 8%. PCLN has consistently delivered positive earnings surprises, beating in each of the trailing four quarters. This is a company that often beats on the bottom line, surpassing the Estimize EPS estimates 94% of the time.
A substantial part of the plunge in share prices came after Priceline’s third quarter earnings, when the company delivered weak guidance about future earnings. However, nothing has changed in the business’s core strengths as PCLN continues to deliver impressive earnings despite weak economic conditions. The company’s sheer volume in available properties compared to its peers, has put PCLN in a position in which it can afford to place excess inventory on TripAdvisor’s Instant Booking platform without giving up its competitive advantage. The company’s recent partnership with Facebook and the open integration of OpenTable in its legacy platforms are expected to gain further traction.
Despite a weakened economy in China, Priceline sees huge potential there, as the expanding Chinese middle class has led to increased travel. China is arguably the most sought after travel market in the world, projected to eclipse $75 billion in revenue by 2017. PCLN has sought partnerships in the region, including pumping $2 billion in Ctrip, China’s leading travel booking site. Moving forward, Priceline should see further market share gains across international markets as currency headwinds subside.
While Priceline remains dominant against direct competitors such as Expedia and TripAdvisor, they are starting to see stiff competition from vacation rental sites such as Airbnb and even Google. Amid concerns that Airbnb is infringing on PCLN’s user base, major banks downgraded the company’s stock rating to neutral. Google, on the other hand, aggregates travel resources on its website, eliminating the need to visit sites like PCLN. That said, if Priceline can deliver better than expected earnings to cap off fiscal 2015, then it should be able to regain recent losses.
Do you think PCLN can beat estimates? There is still time to get your estimate in here!