Priceline skeptics might want to read the Robertson/Stephens analysis...
"BELIEVE THE COMMERCIALS? PRICELINE IS BIG, REALLY BIG!
We recently raised our revenue estimates for Priceline following the
company's preannouncement of strong revenues and smaller losses.
Following this week's full release of Q4 results, which were
slightly better than preannounced levels, we again raised our
estimates, this time increasing our revenue and EPS outlook as a
result of exceptionally strong business momentum and improved
operating leverage. Specifically, we believe Priceline's new
businesses are growing quickly, benefiting from the added traffic
the others businesses bring to the site. We continue to be impressed
by Priceline's strategy of selectively entering new markets through
partnerships (like WebHouse Club) that are structured such that
Priceline's investors reap the near-term benefit of high gross
margin revenues and the potential long-term benefit of consolidation
of attractive business partners. Priceline's management indicated
plans to enter several new businesses in 2000, including new
insurance products, credit cards, additional international markets,
vacation packages, and cruises. In addition, we believe Priceline
could enter the B2B space in the second half of this year, which by
our estimates could prove an even larger market opportunity for
Priceline than the B2C sector. What's all this mean to investors? We
believe it means Priceline (as their ads say) is going to get BIG,
really big and really fast. In our view, investors dramatically
underestimate the widespread applicability of Priceline's
name-your-price business model in both the B2C and B2B sectors. As a
result, we believe Priceline could grow into a valuation several
times its current levels and thus, Priceline remains our single
Strong Buy rated stock." |
