Priceline Shares Surge Fuelled by the Strong Q4 Numbers

Priceline, a reputed online travel agent, posted strong Q4 earnings, which led to its stock rising by 6% during the intraday trading. It has properties that include Agoda, Booking.com, and kayak along with its namesake site.

In this result, the company posted a 17.4% increase in revenue. The market estimate was $2.32 billion, while it came up with the figure of $2.35 billion in revenue. The impressive rise in revenue is mainly attributed to the big 31% jump in one of the biggest segments of Priceline, which is ‘room nights booked’. This segment grew fastest in at least two years.

Glenn Fogel, the Chief Operating Officer of Priceline said, “The company saw solid organic growth and attractive profit margins in its hotel segment, and credited accelerating growth on its scaled accommodations platform and strong execution by our global teams.”

If we see the bottom line, the adjusted EPS (earnings per share) increased by 32% to touch $14.21, which beat the market expectations of $13.01 by a good margin. In the same quarter last year, the EPS was $10.73 on $1.99 billion in revenue.

In the year 2015, the Americans had wasted 658 million vacation days, but during the last year this trend changed and that is reflecting on the results of Priceline. The company managed gross bookings of $15.11 billion, whereas the same expected by FactSet’s consensus was $14.57 billion.

In the last one year, the stock of Priceline has been on a northern trajectory surging by some 30 percent in 12 months. The all-time intraday high of the stock is $1,664.99, which was made recently on Feb. 23. Some analysts are of the opinion that given the strong performance of the company the stock has the potential to touch $2000.

When the company posted its third quarter earnings, it said that Open Table, its restaurant booking site will cut down on its growth story. The same could be seen in this quarter earnings when the results were impacted negatively by $941 million impairment charge. This happened as the expansion strategy at Open Table is slowly taking shape.

The company said in a statement, “While OpenTable will continue to pursue … growth opportunities, they will do so on a more measured and deliberate basis.”

The high momentum in the hotel bookings might result in making 2017 another winning year for the company.

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