Priceline.com Inc. evokes bullish sentiments owing to its non-US business
Published: 21 Jan 2008
According to Dow Jones Newswires, Arieh Coll, a fund manager at Eaton Vance Management in Boston, shared that the people who have a negative view of Priceline "are overly focused on the North American business and are ignoring the huge opportunities in Europe and in Asia."
"Specifically, what they see in the US is a company that is ranked third or fourth in the industry and is losing market share, as opposed to the company in Europe that is ranked No. 1 in the online hotel reservation space and growing 100% year over year," Coll reportedly said. It was highlighted that through the first three quarters of 2007, 55% of Priceline's revenue came from its overseas operations.
Shares of Priceline.com Inc. rose last Friday morning after a Citi Investment Research analyst upgraded the online travel website to "Buy" from "Hold", citing the company's resiliency in a tough economic climate. The stock added $5.84, or 6.5%, to $95.20 after the opening bell.
"We are fully cognizant that we are upgrading Priceline to `Buy' at a time when recession fears have turned market sentiment negative for consumer facing stocks," analyst Mark S. Mahaney said in a client note, according to a report by AP.
Yet the Norwalk, Conn., company's fundamentals remain intact, with more than 60% of bookings coming from outside the US and an attractive share value, he said. The stock has fallen nearly 27% from an all-time high of $120.67 on December 5.
"We have consistently viewed Priceline as a core Internet holding, with a particularly attractive European business model," said Mahaney, who also kept his $124 price target.
Priceline.com believes that Booking.com is Europe's largest and fastest growing hotel reservation service, with a network of affiliated websites. Booking.com operates in over 60 countries in 16 languages and offers its customers access to over 38,000 participating hotels worldwide.