What To Expect From Priceline’s Q4 Earnings

Priceline recently announced that its name is changing to Booking Holdings. The ticker will change to BKNG from PCLN. These changes came in ahead of its fourth-quarter results, expected to be announced on February 27. In the first nine months of 2017, the company reported a strong performance. The primary contributing factor has been its revenues from the accommodation reservations segment, which constitutes approximately 90% of its revenues. Revenues from Booking.com have been the major reason behind the growth in accommodation reservations, which is likely why the company is changing its name to focus on its largest brand. We expect Priceline to report strong results for Q4 as well, which will be driven by the company’s strategy to continue making investments across.

Please refer to our dashboard analysis on Booking Holdings (previously Priceline), which outlines our near-term expectations for the company.

Below we discuss the main areas which will help Priceline to continue on its growth path:

Priceline’s strategy to capture greater market share by investing in brand advertising over the years has helped the company improve its performance, and should provide a further boost moving forward. These investments are a significant source of direct traffic, as the company has seen its vacation rental business scaling up rapidly. Through 2016, advertising for Booking.com was done in just 12 countries, while it was projected to reach 30 countries by the end of 2017. This spend could initially put pressure on margins, but should drive growth over the longer term.

Growth in the accommodation reservations segment has been largely fueled by growth at Booking.com – the most popular booking platform in the world. At the end of September 2017, Booking.com had 1.5 million bookable properties on its platform (with 26.9 million potentially bookable rooms) reflecting a 41% year-over-year growth. Although the company is the largest OTA in the world, its global travel market share still remains relatively low, and provides an opportunity for more growth.