How Priceline Can 'Negotiate' More Upside

NEW YORK (TheStreet) --With Priceline.com(PCLN) reporting mixed first-quarter results, analysts still believe there's plenty of room to "negotiate" a higher stock price, despite worries over Europe.

The Norwalk, Conn.-based company posted first-quarter non-GAAP earnings that beat Wall Street expectations, but was cautious on the second quarter, especially in Europe, where it generates the majority of its revenue.

William Shatner's "Negotiator" may have been killed off, but priceline's chances for higher share price are alive and well, analysts say.

Pricline, which competes with Expedia(EXPE) , Orbitz(OWW) , and Google(GOOG) , noted that Europe was soft (not something we didn't already know), but it has still been able to keep margins high as consumers maintain price sensitivity. EBITDA earnings before interest, taxes, depreciation, and amortization margins rose 250 basis points to 36.8% during the quarter.

Bank of American Merrill Lynch analyst Justin Post said the second-quarter guidance was very similar to the first-quarter guidance, and Priceline shares managed to rise 33% in the past three months. The stock was losing 4.5% to $686.78 in morning trades.

"Priceline built in bookings deceleration in remainder of 2Q into guidance and, if Europe holds up, we see potential for 50%+ ex-FX bookings growth in 2Q (modest deceleration vs 1Q) and bookings upside in 3Q (vs. our 37% ex-FX est.) on easier year-over-year comps," Post wrote in his research note. He ha a buy rating on the stock and raised his price target to $810 from $800.

The company may have been conservative with its second-quarter guidance, wrote Citigroup analyst Mark Mahaney in a research note, but Priceline has "reasonably sustainable competitive advantages in Europe," and "significant Asia & Latin American growth drivers with Agoda & Booking.com."