The Priceline Group Is An American Based Company

1578 WordsFeb 25, 20177 Pages
Long: PCLN (Market Cap: $80.73B) 1. Summary Thesis: The Priceline Group is an American-based company that provides travel and related services to consumers and local partners. It has six primary brands: Booking.com, Priceline.com, agoda.com, KAYAK, Rentalcars.com and OpenTable. Among these brands, Booking.com is the company’s main platform. Now, The Priceline Group operates in over 200 countries and areas and becomes the biggest online travel agency in the world. The total revenues of the Priceline Group in 2015 were about 9,224 million. It increased 9.3% compared to the year ended December 31, 2014. And the revenue can be classified into three categories: Agency revenues, merchant revenues and advertising and other revenues. The…show more content…
It is higher than the current stock price, $1631.62 per share. Therefore, I suggest to buy the PCLN stock. 2. Background: Agency revenues are about 70% of Priceline’s total revenues. They are derived from travel-related transactions from where Priceline is not the merchant of record and where the prices are determined by third parties. This means that Priceline plays a role of an agency, connects customers and third parties and then gets the commissions. The revenues from this part include travel, commissions, GDS reservation booking fees related to certain travel services, travel insurance fees and customer processing fees. As the main platform of Priceline, booking.com contributes a lot of revenues to its parent company. It claims that the website lists about 1,200,000 properties in 225 countries and books 1,200,000 room nights per day. Therefore, almost all of its revenue is agency revenue made up of travel commissions. Agency revenues for the year ended December 31, 2015 increased 11.7% compared to the year ended December 31, 2014. The growth of business of Booking.com, rentalcars.com, priceline.com and agoda.com led to the increasing. But the stronger U.S. Dollar significantly adversely affected the growth of agency revenues which was expressed in U.S. Dollars. Merchant revenues make up about 23% of Priceline’s total revenues. They are derived from services where Priceline is the
Open Document