Why Expedia (EXPE) is Much Worse Than Priceline (PCLN)

Jim Cramer recently claimed in this article, that despite the 1900% gain, Priceline (PCLN) is still cheap. I tend to agree with him, particularly when looking at a peer stock – Expedia (EXPE ). Both stocks have turbo-charged growth – one needs to focus on the top line growth as EXPE has had some funky EPS growth.

Looking down quickly at the tables below, Priceline has a lower PE, lower volatility, more consistent EPS growth, and stronger revenue growth going forward. I definitely give it the edge in this head to head.

When comparing two stocks in the same industry, with similar business models, often one emerges as the clearly better company – that is the one you wan to own. In this case, it is Priceline.

Stock PE Price/Sales Div Yield (Trailing Annual) Volatility
PCLN 33.1 9.2 N/A 0.27
EXPE 59.74 1.7 0.9% 0.45

Priceline has definitely been the consistent EPS grower over the past few quarters.

Stock EPS Qtr. On Qtr. Growth Rev Qtr. On Qtr. Growth
PCLN 34.8%   11/2013
21.9%   8/2013
34.5%   5/2013
27.5%   2/2013
33.1%   11/2013
26.6%   8/2013
25.6%   5/2013
20.2%   2/2013
EXPE 0.8%   10/2013
-32.9%   7/2013
N/A   4/2013
-90.7%   2/2013
16.9%   10/2013
15.9%   7/2013
23.9%   4/2013
23.8%   2/2013

Going forward, PCLN has the advantage in revenue growth, while EXPE is coming up on easy compares, or even previous negative quarter EPS growth, hence the lack of data looking forward. In situations like this, focus on the revenue growth.

Stock Current Qtr
EPS Growth
Forecast
Next Qtr
EPS Growth
Forecast
Current Qtr
Rev Growth
Forecast
Next Qtr
Rev Growth
Forecast
PCLN 53.5% ( High )
47% ( Ave. )
39.1% ( Low )
64.9% ( High )
48.9% ( Ave. )
28.2% ( Low )
31% ( High )
26.8% ( Ave. )
23.4% ( Low )
34.4% ( High )
26.7% ( Ave. )
18.3% ( Low )
EXPE 2138.5% ( High )
1699.2% ( Ave. )
1469% ( Low )
N/A
N/A
N/A
23.1% ( High )
16.9% ( Ave. )
12.8% ( Low )
19.6% ( High )
15.6% ( Ave. )
8.7% ( Low )

 

Technical Analysis 

Beware, PCLN is overbought on a short term basis, and is hugging the top of its channel. If possible wait until it retreats to below that moving average. Hopefully the stock won’t run away from you.

PCLN

I’ve included the quarter-on-quarter charts for these stocks as they can illustrate visually the growth data in the tables above. Consistency is what to look for in these charts – easy to see with PCLN.

 

Source: QoQ Charts
 

Source: QoQ Charts