BANCBOSTON ROBERTSON STEPHENS
Keith E. Benjamin, CFA - 415-693-3285
mailto:Keith@rsco.com
PRICELINE - CONSUMERS ADOPTING NEW MODEL QUICKLY - Priceline.com
reported Q1 revenues of $49.4M and EPS of ($0.12), well above our
estimates of $42.0 million and ($0.14). We have been surprised by how
quickly consumers have adopted this model, which allows consumers, and
eventually businesses, to name their own price for goods and services.
For reference, the company sold more than 330,000 airline tickets in its
first 12 months of operation, for an average of 6,200 tickets per week.
Priceline is now selling an average of more than 25,000 tickets per
week. We expect the stock can effectively be driven as the company
reaches milestones of traffic, revenues, new categories, deals, etc.
Its brand has very quickly achieved brand recognition on par with the
Web leaders, suggesting the power of the service. We believe the
concept has compelling applications for business-to-business
transactions long term. We believe Priceline.com is a new and
differentiable Web business model that can grow into a very large
valuation, at the high end of even the top companies. As such, we
raised our rating to a Strong Buy this week.
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