Recapping some of the insights from this writer, let’s take a look at Expedia & Priceline, two travel-booking companies.
- Priceline. http://www.google.com/finance?q=priceline earned $3 billion in revenues in 2009 with expected earnings to grow 17% in 2010. EBITDA is expected to reach nearly $950 million in 2010, up 12% YoY.
- Expedia earned $2.3 billion in fees with expected revenues to grow 19% this year with expanding margins.
Accordingly, if one were to value Expedia at EBITDA, then their shares are worth $45, 93% above the current share price. Taking into account that many internet companies trade at less than half that yield, Expedia is still worth 50% above the current share price.
Source
http://seekingalpha.com/article/192388-priceline-is-properly-valued-while-expedia-is-undervalued
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