July 16, 2017

NASDAQ: PCLN

PRICELINE GROUP INC

BUY HOLD SELL

BUY
RATING SINCE 07/13/2010
A+ A A- B+ B B- C+ C C- D+ D D- E+ E E- F TARGET PRICE $2,547

Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
NA NA 1.41 $95.4 Billion $1,305-$1,951 $1,941

Sector: Consumer Goods & Svcs Sub-Industry: Internet & Direct Marketing Retail Source: S&P
Weekly Price: (US$) SMA (50) SMA (100) 1 Year 2 Years
PCLN BUSINESS DESCRIPTION
The Priceline Group Inc. provides online travel and 2,600
TARGET
TARGET
TARGET PRICE
TARGETPRICE $2,547.17
PRICE$2,547.17
PRICE $2,547.17
$2,547.17
restaurant reservation, and related services. 2,400

STOCK PERFORMANCE (%) 2,200

3 Mo. 1 Yr. 3 Yr (Ann)
2,000
Price Change 11.61 44.97 16.89
1,800
GROWTH (%)
1,600
Last Qtr 12 Mo. 3 Yr CAGR
Revenues 12.62 15.55 15.58 1,400
Net Income 21.68 -14.52 3.83
1,200
EPS 21.95 -12.81 5.72
1,000
RETURN ON EQUITY (%) Rating History
PCLN Ind Avg S&P 500 BUY
Q1 2017 20.49 14.01 13.16
Volume in Millions
Q1 2016 28.63 13.98 11.83 6
Q1 2015 28.08 8.49 13.71 4
2
P/E COMPARISON
0
2015 2016 2017
COMPUSTAT for Price and Volume, TheStreet Ratings, Inc. for Rating History

RECOMMENDATION
We rate PRICELINE GROUP INC (PCLN) a BUY. This is driven by a number of strengths, which we believe
should have a greater impact than any weaknesses, and should give investors a better performance
opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its
24.41 solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by
43.80 185.65 most measures, expanding profit margins and good cash flow from operations. Although the company may
PCLN Ind Avg S&P 500 harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

HIGHLIGHTS
EPS ANALYSIS¹ ($) Investors have apparently begun to recognize positive factors similar to those we have mentioned in this
report, including earnings growth. This has helped drive up the company's shares by a sharp 44.97% over the
past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although
almost any stock can fall in a broad market decline, PCLN should continue to move higher despite the fact
that it has already enjoyed a very nice gain in the past year.
Q1 7.47
Q1 6.36

PCLN's revenue growth trails the industry average of 25.3%. Since the same quarter one year prior, revenues
Q3 23.41
Q4 10.00

Q2 11.60
Q3 10.13
Q4 13.47

rose by 12.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
Q2 9.94

Q1 9.11

The debt-to-equity ratio is somewhat low, currently at 0.77, and is less than that of the industry average,
2015 2016 2017 implying that there has been a relatively successful effort in the management of debt levels. To add to this,
NA = not available NM = not meaningful
PCLN has a quick ratio of 1.94, which demonstrates the ability of the company to cover short-term liquidity
needs.
1 Compustat fiscal year convention is used for all fundamental
data items.
The gross profit margin for PRICELINE GROUP INC is currently very high, coming in at 96.48%. It has increased
from the same quarter the previous year. Along with this, the net profit margin of 18.83% significantly
outperformed against the industry average.

Net operating cash flow has increased to $380.62 million or 10.53% when compared to the same quarter last
year. Despite an increase in cash flow, PRICELINE GROUP INC's cash flow growth rate is still lower than the
industry average growth rate of 26.70%.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 1
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: PCLN

PRICELINE GROUP INC

Sector: Consumer Goods & Svcs Internet & Direct Marketing Retail Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
NA NA 1.41 $95.4 Billion $1,305-$1,951 $1,941

PEER GROUP ANALYSIS INDUSTRY ANALYSIS

REVENUE GROWTH AND EBITDA MARGIN*
The internet and catalog retailing industry includes 16,000 companies with combined annual revenue of over
$160 billion. Major companies include Lands’ End, LL Bean, Amazon.com (AMZN), Overstock.com (OSTK) and
60%

Hanover Direct. The top 50 companies account for approximately 60% of total industry revenue. The catalog
FA

retail sector consists of mail order, television and catalog channels while internet retail includes all services
VO

JD NFLX through online channels. Demand is driven by consumer spending, which ties the profitability of companies to
RA
BL

their active customer base.

E

EXPE AMZN
PCLN
Over the past five years, the industry pattern has shifted from catalog to internet sales. Internet sales have
QVCB QVCA been the driver for overall health of the internet & catalog industry as internet use has increased to over 70%
TRIP
of US households. The evolution of secure user interfaces and the increased convenience of online shopping
Revenue Growth (TTM)

are expected to drive growth in the coming quarters. In order to increase online sales, companies offer
reduced prices, free shipping and more variety. Although the broader retail industry is expected to remain
sluggish during the recovery from the US economic slowdown, the internet will help drive sales.
UN
FA
VO
-60%

US online retail has evolved from a fledgling industry to a mature, mainstream, and integrated industry with
RA
B

multiple offline channels. However, the next phase of e-commerce growth will require retailers to innovate
LE

LVNTA
-300%
EBITDA Margin (TTM)
Companies with higher EBITDA margins and
revenue growth rates are outperforming companies
with lower EBITDA margins and revenue growth
rates. Companies for this scatter plot have a market
capitalization between $4.6 Billion and $478.3 Billion.
Companies with NA or NM values do not appear.
*EBITDA – Earnings Before Interest, Taxes, Depreciation and
Amortization.
100% and invest in technologies that optimize the connection between online and offline elements. Failure to
address risks associated with payment methods, credit card fraud and other consumer fraud could hamper
sales growth.
Catalog retailing has witnessed a dynamic shift in its business model from call-centers to websites. Many
catalog retailers have adapted their operations to the web as a result of a change in customer preferences.
Companies such as L.L. Bean and Lands’ End have succeeded with this strategy while also maintaining their
catalog operations. By doing so, they provide services to traditional catalog shoppers and enjoy a web
operation that helps keep fixed-costs down while attracting new customers. Catalogs are currently driving
more than half of internet sales.

REVENUE GROWTH AND EARNINGS YIELD The catalog industry shows a trend of sustained growth in multi-channel retailing. The two main channels,
namely direct-to-consumer (DTC) and store, will emerge from the convergence of catalog and internet sales.
60%

CTRP The industry is expected to experience higher sales growth in the direct-to-consumer segment.
FA
VO

NFLX
RA

JD PEER GROUP: Internet & Catalog Retail

EXPE VIPS
BL

Recent Market Price/ Net Sales Net Income

E

AMZN
PCLN Ticker Company Name Price ($) Cap ($M) Earnings TTM ($M) TTM ($M)
QVCA PCLN PRICELINE GROUP INC 1,940.70 95,370 43.80 11,014.29 2,216.19
QVCB
TRIP NFLX NETFLIX INC 158.21 68,189 208.17 9,509.57 337.24
VIPS VIPSHOP HOLDINGS LTD -ADR 11.33 5,750 22.66 8,581.24 299.95
Revenue Growth (TTM)

JD JD.COM INC -ADR 41.43 49,433 NM 40,169.49 -372.46

UN

TRIP TRIPADVISOR INC 38.03 4,884 53.56 1,500.00 104.00

FA

AMZN AMAZON.COM INC 1,000.63 478,276 188.09 142,573.00 2,582.00

VO
-60%

RA

LVNTA LIBERTY VENTURES 53.75 4,586 5.24 289.00 1,204.00

B
LE

-2.5% LVNTA20% CTRP CTRIP.COM INTL LTD 56.17 29,413 936.17 3,005.56 50.75
Earnings Yield (TTM) EXPE EXPEDIA INC 152.90 21,123 78.01 9,058.34 304.32
Companies that exhibit both a high earnings yield QVCB LIBERTY INTERACTV CP QVC GRP 23.36 10,400 23.36 10,175.00 474.00
and high revenue growth are generally more QVCA LIBERTY INTERACTV CP QVC GRP 23.02 10,400 23.02 10,175.00 474.00
attractive than companies with low revenue growth The peer group comparison is based on Major Internet & Direct Marketing Retail companies of comparable size.
and low earnings yield. Companies for this scatter
plot have revenue growth rates between -57.9% and
53.6%. Companies with NA or NM values do not
appear.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 2
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: PCLN

PRICELINE GROUP INC

Sector: Consumer Goods & Svcs Internet & Direct Marketing Retail Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
NA NA 1.41 $95.4 Billion $1,305-$1,951 $1,941

COMPANY DESCRIPTION STOCK-AT-A-GLANCE

The Priceline Group Inc. provides online travel and Below is a summary of the major fundamental and technical factors we consider when determining our
restaurant reservation, and related services. The overall recommendation of PCLN shares. It is provided in order to give you a deeper understanding of our
company operates Booking.com, which offers online rating methodology as well as to paint a more complete picture of a stock's strengths and weaknesses. It is
accommodation reservations services; and priceline.com important to note, however, that these factors only tell part of the story. To gain an even more comprehensive
that provides hotel, rental car, airline ticket, and vacation understanding of our stance on the stock, these factors must be assessed in combination with the stock’s
package reservation services. It also operates KAYAK, an valuation. Please refer to our Valuation section on page 5 for further information.
online price comparison service that allows consumers to
search and compare travel itineraries and prices, FACTOR SCORE
including airline ticket, accommodation reservation, and
rental car reservation information from various travel Growth out of 5 stars 3.5
Websites at once; and agoda.com, an online Measures the growth of both the company's income statement and weak strong
accommodation reservation service primarily for cash flow. On this factor, PCLN has a growth score better than 60% of
consumers in the Asia-Pacific region. In addition, the the stocks we rate.
company offers Rentalcars.com that offers car rental
reservation services; and OpenTable, which provides
online restaurant reservation services to consumers and
Total Return out of 5 stars 5.0
reservation management services to restaurants. Further, Measures the historical price movement of the stock. The stock weak strong
it provides global distribution system reservation booking performance of this company has beaten 90% of the companies we
and travel insurance services. The company was formerly cover.
known as priceline.com Incorporated and changed its
name to The Priceline Group Inc. in April 2014. The Efficiency out of 5 stars 5.0
Priceline Group Inc. was founded in 1997 and is Measures the strength and historic growth of a company's return on weak strong
headquartered in Norwalk, Connecticut. invested capital. The company has generated more income per dollar of
capital than 90% of the companies we review.
PRICELINE GROUP INC
800 Connecticut Avenue
Norwalk, CT 06854
Price volatility out of 5 stars 4.5
USA Measures the volatility of the company's stock price historically. The weak strong
Phone: 203-299-8000 stock is less volatile than 80% of the stocks we monitor.
http://www.pricelinegroup.com
Solvency out of 5 stars 5.0
Measures the solvency of the company based on several ratios. The weak strong
company is more solvent than 90% of the companies we analyze.

Income out of 5 stars 0.5

Measures dividend yield and payouts to shareholders. This company weak strong
pays no dividends.

THESTREET RATINGS RESEARCH METHODOLOGY

TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both
price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to
perform against a general benchmark of the equities market and interest rates. While our model is
quantitative, it utilizes both subjective and objective elements. For instance, subjective elements include
expected equities market returns, future interest rates, implied industry outlook and forecasted company
earnings. Objective elements include volatility of past operating revenues, financial strength, and company
cash flows.

Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown
as compared to potential profit volatility, i.e.how much one is willing to risk in order to earn profits; the level of
acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings
growth; and the financial strength of the underlying company as compared to its stock's valuation as
compared to projected earnings growth; and the financial strength of the underlying company as compared
to its stock's performance. These and many more derived observations are then combined, ranked, weighted,
and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of
selecting stocks.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 3
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: PCLN

PRICELINE GROUP INC

Sector: Consumer Goods & Svcs Internet & Direct Marketing Retail Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
NA NA 1.41 $95.4 Billion $1,305-$1,951 $1,941

Consensus EPS Estimates² ($) FINANCIAL ANALYSIS

IBES consensus estimates are provided by Thomson Financial
PRICELINE GROUP INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially
unchanged when compared to the same period a year ago. The company has grown sales and net income
during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up
with the growth of the average competitor within its industry. PRICELINE GROUP INC has strong liquidity.
Currently, the Quick Ratio is 1.94 which shows the ability to cover short-term cash needs. The company's
liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 19.42% from the same quarter last
14.09 74.05 E 85.62 E year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the
Q2 FY17 2017(E) 2018(E) near future.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the
INCOME STATEMENT next 12-months. To learn more visit www.TheStreetRatings.com.
Q1 FY17 Q1 FY16
Net Sales ($mil) 2,419.40 2,148.12
EBITDA ($mil) 639.89 623.19
EBIT ($mil) 556.46 550.32
Net Income ($mil) 455.62 374.42

BALANCE SHEET
Q1 FY17 Q1 FY16
Cash & Equiv. ($mil) 5,371.11 3,383.64
Total Assets ($mil) 21,994.25 18,334.55
Total Debt ($mil) 8,284.66 6,321.20
Equity ($mil) 10,811.02 9,052.37

PROFITABILITY
Q1 FY17 Q1 FY16
Gross Profit Margin 96.48% 94.01%
EBITDA Margin 26.44% 29.01%
Operating Margin 23.00% 25.62%
Sales Turnover 0.50 0.52
Return on Assets 10.07% 14.13%
Return on Equity 20.49% 28.63%

DEBT
Q1 FY17 Q1 FY16
Current Ratio 2.15 2.45
Debt/Capital 0.43 0.41
Interest Expense 55.72 46.89
Interest Coverage 9.99 11.74

SHARE DATA
Q1 FY17 Q1 FY16
Shares outstanding (mil) 49 50
Div / share 0.00 0.00
EPS 9.11 7.47
Book value / share 219.83 182.37
Institutional Own % NA NA
Avg Daily Volume 487,203 400,185
2 Sum of quarterly figures may not match annual estimates due to
use of median consensus estimates.

This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 4
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.
 July 16, 2017
NASDAQ: PCLN

PRICELINE GROUP INC

Sector: Consumer Goods & Svcs Internet & Direct Marketing Retail Source: S&P
Annual Dividend Rate Annual Dividend Yield Beta Market Capitalization 52-Week Range Price as of 7/13/2017
NA NA 1.41 $95.4 Billion $1,305-$1,951 $1,941

RATINGS HISTORY VALUATION

Our rating for PRICELINE GROUP INC has not BUY. The current P/E ratio indicates a significant discount compared to an average of 185.65 for the Internet
changed since 8/9/2005. As of 7/13/2017, the stock & Catalog Retail industry and a significant premium compared to the S&P 500 average of 24.41. To use
was trading at a price of $1940.70 which is .6% another comparison, its price-to-book ratio of 8.83 indicates a significant premium versus the S&P 500
below its 52-week high of $1951.40 and 48.7% above average of 3.04 and a significant discount versus the industry average of 18.79. The price-to-sales ratio is well
its 52-week low of $1305.09. above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these
and other key valuation criteria, PRICELINE GROUP INC proves to trade at a discount to investment
2 Year Chart alternatives within the industry.
$2,000
BUY: $1,171.39

$1,750 Price/Earnings 1 2 3 4 5 Price/CashFlow 1 2 3 4 5

premium discount premium discount
$1,500 PCLN 43.80 Peers 185.65 PCLN 24.08 Peers 27.31
• Discount. A lower P/E ratio than its peers can • Discount. The P/CF ratio, a stock’s price divided by
$1,250 signify a less expensive stock or lower growth the company's cash flow from operations, is useful
expectations. for comparing companies with different capital
2015 2016 • PCLN is trading at a significant discount to its requirements or financing structures.
peers. • PCLN is trading at a discount to its peers.

MOST RECENT RATINGS CHANGES

Price/Projected Earnings 1 2 3 4 5 Price to Earnings/Growth 1 2 3 4 5
premium discount premium discount
Date Price Action From To PCLN 22.67 Peers 110.66 PCLN 0.59 Peers 3.66
7/13/15 $1,171.39 No Change Buy Buy • Discount. A lower price-to-projected earnings ratio • Discount. The PEG ratio is the stock’s P/E divided
Price reflects the closing price as of the date listed, if available than its peers can signify a less expensive stock or by the consensus estimate of long-term earnings
lower future growth expectations. growth. Faster growth can justify higher price
• PCLN is trading at a significant discount to its multiples.
RATINGS DEFINITIONS &
peers. • PCLN trades at a significant discount to its peers.
DISTRIBUTION OF THESTREET RATINGS
(as of 7/13/2017) Price/Book 1 2 3 4 5 Earnings Growth 1 2 3 4 5
premium discount lower higher
43.81% Buy - We believe that this stock has the PCLN 8.83 Peers 18.79 PCLN -12.81 Peers 210.82
opportunity to appreciate and produce a total return of • Discount. A lower price-to-book ratio makes a • Lower. Elevated earnings growth rates can lead to
more than 10% over the next 12 months. stock more attractive to investors seeking stocks capital appreciation and justify higher
with lower market values per dollar of equity on the price-to-earnings ratios.
30.69% Hold - We do not believe this stock offers balance sheet. • However, PCLN is expected to significantly trail its
conclusive evidence to warrant the purchase or sale of • PCLN is trading at a significant discount to its peers on the basis of its earnings growth rate.
shares at this time and that its likelihood of positive total peers.
return is roughly in balance with the risk of loss.
Price/Sales 1 2 3 4 5 Sales Growth 1 2 3 4 5
25.50% Sell - We believe that this stock is likely to premium discount lower higher
decline by more than 10% over the next 12 months, with PCLN 8.67 Peers 4.20 PCLN 15.55 Peers 48.49
the risk involved too great to compensate for any • Premium. In the absence of P/E and P/B multiples, • Lower. A sales growth rate that trails the industry
possible returns. the price-to-sales ratio can display the value implies that a company is losing market share.
investors are placing on each dollar of sales. • PCLN significantly trails its peers on the basis of
• PCLN is trading at a significant premium to its sales growth
TheStreet Ratings industry.
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This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither TheStreet Ratings nor any other party guarantees its accuracy Report Date: July 16, 2017 PAGE 5
or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of TheStreet Ratings. Copyright(c) 2006-2016. All rights reserved.