An irreverent look at Wall Street
Goldman's at 225What's changedPriceline posted stronger than expected 3Q2009 results, especially internationally. Gross bookings, revenue,and EPS of $2,723 mn (+33% yoy), $731 mn (+30% yoy), and $3.45 (+44% yoy), beat our above-consensus$2,568 mn, $696 mn, and $2.90 estimates. Unit growth accelerated (to 47% yoy from 36% in 2Q2009) due toairline tickets sold (+30% yoy vs. 14%) and hotel room nights (+56% yoy vs. 44%, twice as fast as Expedia).Margins generally exceeded our forecasts. 4Q gross bookings and EPS guidance at the midpoints are$2,000 mn (+35% yoy) and $1.57 (+22% yoy), above consensus though slightly below our estimates. Weincrease 2009/2010/2011E EPS to $8.30/$10.01/$11.64 from $7.72/$9.18/ $10.59 due to 3Q outperformanceand a better 2009 outlook.Implications(1) International hotel growth despite weak consumption in Europe highlights that online bookings penetrationrates are still much lower in Europe than in the US, and that Priceline remains the Europe leader.(2) Air volume growth matching or exceeding rates at competitors suggests that competitor fee cuts takeshare primarily from supplier sites, rather than from Priceline.(3) Management cautioned that comps become tougher from November, as lower prices drove volume; we believe this is intended to discourage investors from assuming similarly large beat-and-raises in futurequarters.ValuationWe raise our 6-month DCF/PEG-based price target to $225 from $210.
up 30--I'm gone..thanks shortsellers for all the manna!!!!!!you've been amazoned again!!!!
great call...couldn't afford it but $30 is crazy!
Options were the play! The Nov cheapies and Jans out of the money $ banked major coin!!!!!!!!!
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