Will Priceline (PCLN) Beat Earnings Estimates this Season? - Analyst Blog
We expect online travel booking company, Priceline.com (PCLN) to beat expectations when it reports fourth-quarter 2014 results on Feb 19.
Why a Likely Positive Surprise?
Our proven model shows that Priceline is likely to beat earnings because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +5.1%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks Rank: Priceline has a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1, 2 or 3 have a significantly higher chance of beating earnings estimates. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
The combination of Priceline’s Zacks Rank #3 and +5.1% ESP makes us reasonably confident in looking for a positive earnings beat.
What is Driving the Better-than-Expected Earnings?
Priceline’s strong market position, compelling product lines, continued innovation and strong position in emerging international markets are expected to result in a positive earnings surprise in the fourth quarter.
We remain optimistic about Priceline’s dominance and growth prospects in the strengthening online travel agency market aided by mobile usage and metasearch. Priceline has been steadily building positions in emerging international markets. It is increasing its hotel inventories, entering into strategic alliances and making acquisitions that should contribute to the fourth-quarter results and beyond.
Additionally, the company’s international business continues to perform well while the domestic business is being helped by deals, promos, prudent marketing, partnerships and acquisitions. We believe that the company’s growth strategies and solid execution will boost results, going ahead.
Other Stocks to Consider
Priceline is not the only firm looking up this earnings season. We also see likely earnings beats coming from these companies:
Impax Laboratories Inc. (IPXL), with an Earnings ESP of +27.27% and a Zacks Rank #1 (Strong Buy).
Assured Guaranty Ltd. (AGO), with an Earnings ESP of +13.04% and a Zacks Rank #1.
TRI Pointe Homes, Inc. (TPH), with an Earnings ESP of +12.50% and a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
PRICELINE.COM (PCLN): Free Stock Analysis Report
IMPAX LABORATRS (IPXL): Free Stock Analysis Report
ASSURED GUARNTY (AGO): Free Stock Analysis Report
TRI POINTE HOME (TPH): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
