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Priceline Can Sustain 30% Growth: Analyst
09 Apr 2012 EDT - CNBC.com
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Priceline's stock is the highest it's been since 1998, but analyst Chad Bartley thinks the online travel booking company can go even higher.

The Pacific Crest senior research analyst, who initiated coverage with an "outperform" rating and an $885 price target, told CNBC Monday that Priceline can sustain 30 percent growth, with margins in the mid-to-high 40 percent range in terms of ebitda , making it "one of the more profitable tech companies." At 19 times earnings, it's also very attractive in terms of valuations than some of its peers, such as Expedia, he said.

Best known in the U.S. for its former spokesman, actor William Shatner, 78 percent of Priceline's hotel and vacation bookings business is now international, with the bulk of that booking in Europe.

While that has been a "tremendous strategy for them" that has driven the outperformance, Bartley said, he's not ignoring Europe's economic troubles. Priceline's fourth-quarter growth slowdown will continue into the first quarter and through 2013, he said.

So where's the growth going to come from? Asia and Latin America, according to the analyst.

As for the competition, he called Google "definitely a disruptor," with its various products, including its Hotel Finder. However, Bartley doesn't view that as a big risk. "We look to Hotel Finder, Google's product, to drive traffic to Priceline's site," he said. "At this point we're not overly concerned."

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