That the travel industry can be fiercely competitive, with its highly fragmented market and difficult to retain customer loyalty, is nothing new. However, Priceline Group Inc. (PCLN) seems to be sailing through the recent quarters like a breeze without a doubt and fourth quarter fiscal 2013 was no exception to the rule. In fact, the company’s name change (formerly Priceline.com) is a sign of growth, as the new name comprises all five Priceline brands – Booking.com, priceline.com, agoda.com, KAYAK and rentalcars.com – in the form of a global business, thereby showcasing the firm’s scale.
So, despite the company’s high target price of $1217.03, its impeccable balance sheet and outstanding returns on capital make it one of the favorite long-term picks among investment gurus like Chase Coleman (Trades, Portfolio) and John Burbank (Trades,Portfolio). But how will the growth streak continue looking forward?
Outranking the Competition
So far 2014 has already shown some changes regarding management, with Darren Huston replacing Jeffrey Boyd’s as the CEO of Priceline in the beginning of the year. However, the change in CEO positions seems merely a formality, as Boyd will remain as chairman of the board and the company’s main growth strategy, comprised of expanding the brands internationally and garnering the network effect, will not be altered in the medium term.
— Guru Focus