”It feels like they’re sandbagging,” says Fast Money trader Guy Adami, “the metrics appear better than the guidance.”
Adami is referring to the latest results from Priceline, in which the company predicted fourth-quarter earnings of $4.90 to $5.00 per share, which was below analysts' average forecast for $5.13. Priceline shares fell 0.7 percent to $505.31 in after-market trading.
”But otherwise, the quarter was outstanding," explains Adami. In a benign tape I think the stock will push toward $550,” he says.
Fred Moran, analyst at The Benchmark Company agrees. "The growth rates are stellar," he says. "Priceline looks compelling."
"I know the trade has worked for a really long time, but I just can't get comfortable with it," counters value investor Karen Finerman. "It trades at a multiple that I could never get behind."
Looking at Priceline earnings a little more closely, the online travel agency said its third-quarter profit was $469 million, or $9.17 per share, compared with $223 million, or $4.41 per share, a year ago.
Excluding one-time items, Priceline reported a profit of $9.95 per share, beating a consensus forecast of $9.30 per share, according to Thomson Reuters I/B/E/S.
The company reported revenue of $1.45 billion, up 45 percent from a year ago and topping a Wall Street forecast for $1.42 billion, according to Thomson Reuters I/B/E/S.
The value of bookings at Priceline was $6.3 billion, an increase of 56.2 percent over a year ago.
Priceline predicted a year-over-year increase in travel bookings of 39 percent to 44 percent for the fourth quarter.