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Priceline (PCLN) Q1 Earnings: Will it Surpass Estimates?
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The Priceline Group Inc. is slated to report first-quarter 2017 earnings on May 9 after the bell.
The company is one of two leading players in a highly fragmented online travel booking market, the other one being Expedia (EXPE - Free Report) . But the two companies are different because Priceline generates most of its revenues overseas, particularly Europe, while Expedia is more focused on North America. Both companies are expanding geographically.
In terms of share price movement, Priceline has outperformed the Zacks Internet Commerce industry on a year-to-date basis. While the stock returned 30.3%, the industry gained 29.6%.
Last Quarter Recap
Priceline.com’s fourth-quarter 2016 earnings and revenues not only came ahead of the Zacks Consensus Estimate but also increased year over year.
Both agency and merchant businesses showed strong momentum on a year-over-year basis. Room nights grew much faster than in the recent past. Rental cars also performed impressively. The only point of weakness was airline tickets.
First Quarter Expectations
For the first quarter of 2017, Priceline expects room nights booked to grow 20%-25% and total gross bookings to grow 17%-22% year over year (19%-24% on a constant currency basis).
Priceline expects gross profit dollars to increase 13%-18% (14%-19% on a constant currency basis), with adjusted EBITDA in the range of $755-795 billion.
Priceline expects gross profit dollars to increase 9.5%-14.5% (11%-16% on a constant currency basis), with adjusted EBITDA in the range of $550-$580 billion.
Pro forma earnings per share (EPS) are expected to come in the range of $8.25-$8.65. The Zacks Consensus Estimate is pegged at $10.72. GAAP EPS is expected in the range of $7.5-$7.9.
What’s in Favor of Priceline?
The U.S. Commerce Department estimates international travel to the U.S. to grow at a CAGR of 3.3% from 2016 to 2021. Inbound travel volumes from Mexico, China, Canada, India and South Korea will be the highest during this period. Visitor volume in 2017 is expected to be up 2.4% from 2016. Since it is a major international player, these trends play into Priceline’s sweet spot and will have an impact on its quarterly performance.
Earnings Surprise History
The company has topped estimates in each of the last four quarters at an average rate of 9.2%. Not just that, the company hasn’t missed estimates in any quarter since 2012, which is a very big deal and is an indication that this quarter will be no different.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) will have a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.
Priceline has a Zacks Rank #3 and an Earnings ESP of +2.28% and that indicates a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Summing Up
Priceline belongs to an attractive industry and has a strong international presence, which is a positive for the business, although FX remains a concern. The company has a solid history of positive surprises. Its positive earnings surprise and a favorable Zacks Rank #3 enhances the likelihood of a positive surprise this time around as well.
Other Stocks to Consider
Here are some companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
The RMR Group Inc. (RMR - Free Report) , with an Earnings ESP of +2.27% and a Zacks Rank #3.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
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Priceline (PCLN) Q1 Earnings: Will it Surpass Estimates?
The Priceline Group Inc. is slated to report first-quarter 2017 earnings on May 9 after the bell.
The company is one of two leading players in a highly fragmented online travel booking market, the other one being Expedia (EXPE - Free Report) . But the two companies are different because Priceline generates most of its revenues overseas, particularly Europe, while Expedia is more focused on North America. Both companies are expanding geographically.
In terms of share price movement, Priceline has outperformed the Zacks Internet Commerce industry on a year-to-date basis. While the stock returned 30.3%, the industry gained 29.6%.
Last Quarter Recap
Priceline.com’s fourth-quarter 2016 earnings and revenues not only came ahead of the Zacks Consensus Estimate but also increased year over year.
Both agency and merchant businesses showed strong momentum on a year-over-year basis. Room nights grew much faster than in the recent past. Rental cars also performed impressively. The only point of weakness was airline tickets.
First Quarter Expectations
For the first quarter of 2017, Priceline expects room nights booked to grow 20%-25% and total gross bookings to grow 17%-22% year over year (19%-24% on a constant currency basis).
Priceline expects gross profit dollars to increase 13%-18% (14%-19% on a constant currency basis), with adjusted EBITDA in the range of $755-795 billion.
Priceline expects gross profit dollars to increase 9.5%-14.5% (11%-16% on a constant currency basis), with adjusted EBITDA in the range of $550-$580 billion.
Pro forma earnings per share (EPS) are expected to come in the range of $8.25-$8.65. The Zacks Consensus Estimate is pegged at $10.72. GAAP EPS is expected in the range of $7.5-$7.9.
What’s in Favor of Priceline?
The U.S. Commerce Department estimates international travel to the U.S. to grow at a CAGR of 3.3% from 2016 to 2021. Inbound travel volumes from Mexico, China, Canada, India and South Korea will be the highest during this period. Visitor volume in 2017 is expected to be up 2.4% from 2016. Since it is a major international player, these trends play into Priceline’s sweet spot and will have an impact on its quarterly performance.
Earnings Surprise History
The company has topped estimates in each of the last four quarters at an average rate of 9.2%. Not just that, the company hasn’t missed estimates in any quarter since 2012, which is a very big deal and is an indication that this quarter will be no different.
The Priceline Group Inc. Price and EPS Surprise
The Priceline Group Inc. Price and EPS Surprise | The Priceline Group Inc. Quote
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) will have a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.
Priceline has a Zacks Rank #3 and an Earnings ESP of +2.28% and that indicates a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Summing Up
Priceline belongs to an attractive industry and has a strong international presence, which is a positive for the business, although FX remains a concern. The company has a solid history of positive surprises. Its positive earnings surprise and a favorable Zacks Rank #3 enhances the likelihood of a positive surprise this time around as well.
Other Stocks to Consider
Here are some companies which, as per our model, have the right combination of elements to post an earnings beat this quarter:
EGain Corp. (EGAN - Free Report) , with an Earnings ESP of +50.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The RMR Group Inc. (RMR - Free Report) , with an Earnings ESP of +2.27% and a Zacks Rank #3.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>