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Option Trading – Will Priceline.com Gain Market Share?



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Feb 12 2007
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Priceline.com Incorporated (Nasdaq: PCLN, stock) is set to announce its’ earning today, Feb-12-2007 after the market close. Priceline.com Incorporated (priceline.com) is an online travel company that offers its customers a range of travel services, including the opportunity to purchase airline tickets, hotel rooms, car rentals, vacation packages and cruises. The Company’s Name Your Own Price system allows its customers to make offers for travel services at prices they set.

Rating Indicators for PCLN:
  • Wall Street consensus : 0.41
  • StockScouter rating : 5 / 10
  • Whisper Number for this stock : N/A
  • Schaeffer rating for this stock : 7 / 10
  • Power Rating : 5 / 10
  • Insider Trading (last 52 weeks) : ($100.4M)
  • Zacks Analysts Rating: Hold
  • Option Trading: Apr 2007 45 Call
  • Implied Volatility (IV) for Mar 2007 $45 Strike : 39.09%
Sales, Income & Growth – For the past 12-months, Priceline.com registered $1.07 Billion sales versus the industry’s $4.05 Billion. Income amounted to $63.10 Million against the industry’s $439.49 Million. While Priceline.com 12-months sales growth is at 13.70%, the income growth is in the region of minus 68.30% (the same industry sector sales growth is at 27.40% and income growth of 88.10%).

Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 6.4%. Priceline.com has a debt/equity ratio of 1.69 compare to industry’s ratio of 0.39.

Stock Resistance & Support Level – The resistance is at 45.98 (52-week high) while the first level support is at 42.70 (50-day moving average).

Risks – The price-to-earnings multiple, 32.90 is higher than the average industry level.

Thomas Weisel analyst Jake Fuller said Priceline demonstrates strong domestic performance with potential upside and expect it to gain market share in the last quarter due to fast-growing European markets. Furthermore more people were said to be spending their holidays elsewhere during the winter season. So I think Priceline should beat the estimate earning again this time. I’m a bit worry about its’ high P/E though.



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