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Valuation of Priceline.com

Valuation of Priceline.com. Professor Joshua Livnat, Ph.D., CPA 311 Tisch Hall New York University 40 W. 4th St. NY NY 10012 Tel. (212) 998-0022 Fax (212) 995-4230 jlivnat@stern.nyu.edu Web page: www.stern.nyu.edu/~jlivnat. Financial Data. Income Statement Ratios. Visitors.

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Valuation of Priceline.com

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  1. Valuation of Priceline.com Professor Joshua Livnat, Ph.D., CPA 311 Tisch Hall New York University 40 W. 4th St. NY NY 10012 Tel. (212) 998-0022 Fax (212) 995-4230 jlivnat@stern.nyu.edu Web page: www.stern.nyu.edu/~jlivnat

  2. Financial Data

  3. Income Statement Ratios

  4. Visitors

  5. Gross Margin (Revenues - CGS)

  6. Regression of Gross Margin on Visitors

  7. Regression of Sell&Mrktg on Visitors

  8. Regression of General&Admin. on Visitors

  9. Regression of R&D on Visitors

  10. Volume Analysis • Assumptions: • Selling & marketing expenses flat after $40MM. • G&A expenses flat after $12 MM.

  11. Forecasted Cash Flows

  12. Valuation

  13. Summary • A unique concept in the Internet space. • Ideal for perishable goods. • Narrow market segment, but not an insignificant one. • Has potential if it can control costs better.

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