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I am a former Systems Engineer turned Trader and Blogger.
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Non Random Walk
  • In The Online Travel Space Priceline (PCLN) Trumps Expedia (EXPE) 0 comments
    Nov 22, 2013 11:34 AM | about stocks: PCLN, EXPE

    Jim Cramer recently claimed in this article, that despite the 1900% gain, Priceline (NASDAQ:PCLN) is still cheap. I tend to agree with him, particularly when looking at a peer stock - Expedia (NASDAQ:EXPE). Both stocks have turbo-charged growth - one needs to focus on the top line growth as EXPE has had some funky EPS growth. For more head to head comparisons like this, check out SideBySideStocks.

    Looking down quickly at the tables below, Priceline has a lower PE, lower volatility, more consistent EPS growth, and stronger revenue growth going forward. I definitely give it the edge in this head to head. When comparing two stocks in the same industry, with similar business models, often one emerges as the clearly better company - that is the one you wan to own. In this case, it is Priceline.

    Stock PE Price/Sales Div Yield (Trailing Annual) Volatility
    PCLN 33.1 9.2 N/A 0.27
    EXPE 59.74 1.7 0.9% 0.45

    Priceline has definitely been the consistent EPS grower over the past few quarters.

    Stock EPS Qtr. On Qtr. Growth Rev Qtr. On Qtr. Growth
    PCLN 34.8% 11/2013 21.9% 8/2013 34.5% 5/2013 27.5% 2/2013 33.1% 11/2013 26.6% 8/2013 25.6% 5/2013 20.2% 2/2013
    EXPE 0.8% 10/2013 -32.9% 7/2013 N/A 4/2013 -90.7% 2/2013 16.9% 10/2013 15.9% 7/2013 23.9% 4/2013 23.8% 2/2013

    Going forward, PCLN has the advantage in revenue growth, while EXPE is coming up on easy compares, or even previous negative quarter EPS growth, hence the lack of data looking forward. In situations like this, focus on the revenue growth.

    Stock Current Qtr EPS Growth Forecast Next Qtr EPS Growth Forecast Current Qtr Rev Growth Forecast Next Qtr Rev Growth Forecast
    PCLN 53.5% ( High ) 47% ( Ave. ) 39.1% ( Low ) 64.9% ( High ) 48.9% ( Ave. ) 28.2% ( Low ) 31% ( High ) 26.8% ( Ave. ) 23.4% ( Low ) 34.4% ( High ) 26.7% ( Ave. ) 18.3% ( Low )
    EXPE 2138.5% ( High ) 1699.2% ( Ave. ) 1469% ( Low ) N/A N/A N/A 23.1% ( High ) 16.9% ( Ave. ) 12.8% ( Low ) 19.6% ( High ) 15.6% ( Ave. ) 8.7% ( Low )

    Technical Analysis

    Beware, PCLN is overbought on a short term basis, and is hugging the top of its channel. If possible wait until it retreats to below that moving average. Hopefully the stock won't run away from you.

    (click to enlarge) I've included the quarter-on-quarter charts for these stocks as they can illustrate visually the growth data in the tables above. Consistency is what to look for in these charts - easy to see with PCLN.

    Source: QoQ Charts Source: QoQ Charts

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: PCLN, EXPE
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