Priceline.com's Price Becomes Unreachable

Priceline.com (PCLN) reported good earnings last quarter, excluding items, the company earned $2.02 per share in the latest quarter. The company earned $67 million, or $1.38 per share, up 35 percent from $49.8 million, or $1 per share, in the same period a year earlier. However the company market capital reached $6.4B, trading at all time high. According to Yahoo finance, Priceline's trailing P/E is at 34.95. This is a warning sign that the stock price may be running ahead of itself.

With all airlines reporting a lack of travelers, investors have reasons to believe the current quarter may disappoint. Its competitor Expedia.com (EXPE) has a revenue of $2.8B, which is 50% larger than Priceline and is trading at the same market cap. Expedia 's gross margin is 78.8%, while Priceline's gross margin is only 50%.

Compare it to another high growth stock, First Solar (FSLR), whose trailing P/E is 20. Investors have been piling up to short the stock since it reported great Q2 earnings.

Disclosure: Author is long FSLR