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Priceline.com (PCLN) is scheduled to release its first-quarter 2013 earnings on Thursday, May 9, at 4:30 pm ET. Below I have provided an update of the quarter as well as an overview of earnings expectations.

Profile and Estimates

Priceline.com has a market cap of $36.38 billion and currently trades for $726.71 per share. Shares are up 17.14% YTD and trade 31.31% above their 52-week low of $553.42. Analysts have a mean target price of $826.63 and a median price target of $827.50 on the shares. Twenty five analysts have an average first-quarter earnings per share estimate of $5.27 on estimated revenues of $1.28 billion. Priceline.com beat the average earnings estimates in each of the last four quarters.

(click to enlarge)

Fundamentals and Highlights (Sources cited below)

Positives

  • Over the last three years revenue and net income growth have averaged 31% and 42.6% respectively.
  • Operating margin of 34.8% and net margin of 27.0% are well above the industry averages 13.4% and 9.1% respectively.
  • ROA of 26.9 and ROE of 43.9 are both above the industry averages 5.1 and 10.1 respectively.
  • D/E of 0.2 is below the industry averages 0.5.
  • Very good growth potential, especially on the international front.
  • ROIC has averaged over 30 in the last four years, was 32.42 last year.
  • EBITDA has more than doubled over the last three years.

Negatives

  • P/B of 9.3 and P/S of 7.1 are both above the industry averages 2.2 and 2.1 respectively.
  • Subject to volatile demand fluctuations and highly competitive market.

Mixed

  • $1.8 billion acquisition of Kayak (KYAK) is being reviewed by the U.K Office of Fair Trading on antitrust grounds. I have this as mixed because I think the acquisition is a positive for Priceline.com should it clear the antitrust allegations/review.

Take Away

Priceline.com shares have performed nicely over the past year and are currently valued, on a P/E basis, lower than Expedia (EXPE). Near its 52-week highs, investors wanting to invest in Priceline.com may want to wait for a pullback before initiating a position. Keep an eye out for earnings on Thursday!

Sources

In addition to the links above, ratios and financial data was sourced from Morningstar.com, which you can find here.

Other company data was sourced from the annual report that can be accessed here [pdf].

Source: Priceline.com's Q1 Earnings Preview