- Priceline Group Inc. is expected to report its Q1 2016 earnings on May 4.
- The analyst consensus expects Priceline to report Non-GAAP EPS of 9.7 on revenue of $2.12B.
- Slowing Forex headwinds could drive Priceline to an earnings beat, boosting the stock price in the process.
Priceline Group Inc. (NASDAQ:PCLN) is scheduled to announce its Q1 2016 earnings on May 4 before the markets open. Priceline stock had been under pressure for most of 2015 after rising forex headwinds dragged growth for a better part of the year. Priceline generates over 86% of its revenue from international operations, which amplified the impact of forex headwinds. However, the stock has seen a revival of sorts with the US dollar flattening out in 2016, leading to a rally of sorts in Priceline stock price.
Will the upcoming earnings report help sustain the recent rally in Priceline stock price? A large beat, driven by a significant pick-up in YoY growth metrics could add further upward momentum to Priceline stock.
Priceline Analyst Estimates
The current analyst consensus estimates Priceline to report non-GAAP EPS of $9.7 and revenue of $2.12 billion. This compares to revenue of $1.84 billion and Non-GAAP EPS of $8.12 in Q1 2015. The analyst consensus implies a 15.2% YoY topline growth and 19% growth in earnings per share.
In the Q4 2015 earnings call, Priceline management guided for YoY revenue growth in the range of 9% - 16% and Non-GAAP EPS in the range of $9-$9.6. Priceline Q1 2016 guidance and analyst estimates are summarised below.
|Q1 2015||Q1 2016 low guidance||Q1 2016 high-end guidance||Q1 2016 Guidance mid-point||Analyst Consensus||Guidance Implied growth (YoY)||Consensus implied growth (YoY)|
|Revenue (in millions of $)||1840.694||2006.356||2135.205||2070.781||2121||12.5%||15.2%|
|Non-GAAP EPS ($)||8.12||9||9.6||9.3||9.7||14.6%||19.5%|
Source: Estimize and Q4 2015 conference call
The management guidance, at its mid-point, implies YoY revenue growth of 12.5% and earnings growth of 14.6% YoY. This compares with top line growth of 9.2% YoY in 2015 and EPS growth of 9.7% YoY. The current earnings whisper anticipates PCLN to report Non-GAAP earnings of $9.96 per share.
Priceline Earnings History
Priceline has a strong history of beating analyst expectations. The company has delivered an earnings surprise in each quarter for the last 3 years. On the revenue front, Priceline has beaten analyst forecasts in 11 out of the last 12 quarterly earnings report. The company has beaten earnings estimates by an average of 5.9% over the last 3 years while delivering an average revenue beat of 1.2% over the same period.
Priceline Stock: Analyst Opinion And Price Targets
Analysts currently have a consensus 'buy' rating on Priceline stock, with 14 out of 30 analysts having a 'buy' rating on the stock. While 5 analysts have graded the stock a 'Strong Buy', 11 analysts assign the stock a 'Hold' rating. With just a single analyst rating the stock at 'Underperform', the analyst community is largely bullish on Priceline stock, heading into the upcoming earnings release.
Slowing Forex Headwinds
The forex headwinds have been abating of late, with the US Dollar weakening against most major global currencies.
Quoting from Priceline's Q1 2015 10-Q:
The U.S. Dollar significantly strengthened against the Euro during 2014, moving from an exchange rate of 1.38 U.S. Dollars per Euro as of January 1, 2014 to 1.21 U.S. Dollars per Euro as of December 31, 2014. The U.S. Dollar strengthened further during the first quarter of 2015 to an exchange rate of 1.07 U.S. Dollars per Euro as of March 31, 2015.
The US Dollar was trading at $1.1381 per Euro at the end of Q1 (on March 31, 2015), implying a 6%+ upside for Euro recorded revenues. With the forex headwinds of 2015 now behind it, Priceline could well surprise in its upcoming earnings release.
The Priceline group is expected to report its earnings on May 4th before markets open. With the analyst estimates as well guidance implying accelerating growth trends, a beat could propel Priceline stock higher post the earnings release. With forex headwinds abating and a history of delivering earnings beats, Priceline looks likely to topple estimates yet again. The earnings whisper number implies for a huge 26 cent beat.