In a research report sent to investors today, RBC Capital analyst Mark Mahaney reiterated an Outperform rating on Priceline.com (NASDAQ:PCLN) with a $1400 price target, which represents a potential upside of 30% from where the stock is currently trading.
Mahaney wrote, “We believe online travel can continue to grow solidly in a double-digit range for the foreseeable future. We estimate that Asia & LatAm are approaching 20% of PCLN’s total bookings. We believe that this should help sustain premium growth rates for PCLN for some time to come and help diversify its exposure away from cyclical macro weakness in Europe. PCLN has consistently grown more quickly than EXPE and OWW in international markets, and we believe it is at least growing in line with the overall North American OTA market as well.”
The analyst concluded, “PCLN remains inexpensive compared to its large cap net peers on a growth-adjusted basis – with a 2016E P/E/G of 0.5x and EV/EBITDA/G of 0.4x. More importantly, at essentially a market multiple (16x P/E), PCLN currently offers an extremely attractive entry point – a highly profitable, FCFgenerating, well-run, premium-growth asset, with provable secular growth drivers ahead of it.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Mark Mahaney has a total average return of 21.8% and a 58.4% success rate. Mahaney has a 30.0% average return when recommending PCLN, and is ranked #19 out of 3413 analysts.