Priceline.com Inc.PCLN

Morningstar Rating

Stock Research and Analysis

by Warren Miller

Priceline.com offers a commodity product in a price-competitive industry. Although scale in the online travel market can lead to network effects, Priceline is not the largest competitor, and as a result it has no economic moat.

Because online travel Read more

Bulls Say

Priceline has an extremely strong presence in Europe relative to its competitors'. This positions it well to take advantage of the fast-paced international Internet adoption rates.

Priceline's international growth is more profitable than its North American business because it can negotiate better premiums with the more fragmented supplier base in Europe and Asia.

In tough economic times, Priceline can get access to better inventory as travel-oriented companies, such as hotels and airlines get desperate to maintain capacity utilization and become willing to sell outside their own sales channels. Read more

Bears Say

Ease of entry into the online travel market could significantly increase the amount of competition Priceline faces in the coming years.

Online travel is becoming increasingly competitive, and meta-search companies with travel aggregation technology may prevent Priceline from selling inventory as effectively as it otherwise could.

As the online travel market becomes more saturated, scale will become a more important differentiator between online travel agencies. Priceline is at a disadvantage to larger companies that can more effectively sell and cross-sell inventory. Read more

Strategy

Priceline aims to fuel growth with international expansion. During the last several years, the company has gone from zero international revenue to more than 50% international revenue. Additionally, global Read more

Management

Jeffery Boyd has been the president and CEO since 2001. We think he and his management team have the experience to capably lead the company. We like that Priceline has separated the chairman and CEO roles to facilitate board independence, and in fact, Read more

Profile

Priceline is an online travel company that provides booking services for hotel rooms, airline tickets, rental cars, cruises, and other vacation packages. The company operates Read more

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