Financial Survey: The Priceline Group (PCLN) versus The Advisory Board Company (ABCO)

The Advisory Board Company (NASDAQ: ABCO) and The Priceline Group (NASDAQ:PCLN) are both mid-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, institutional ownership, earnings, valuation and profitabiliy.

Profitability

This table compares The Advisory Board Company and The Priceline Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Advisory Board Company 12.78% 14.48% 3.58%
The Priceline Group 20.12% 33.94% 16.53%

Volatility and Risk

The Advisory Board Company has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, The Priceline Group has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500.

Institutional and Insider Ownership

96.7% of The Priceline Group shares are held by institutional investors. 4.7% of The Advisory Board Company shares are held by insiders. Comparatively, 0.4% of The Priceline Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for The Advisory Board Company and The Priceline Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Advisory Board Company 1 7 6 0 2.36
The Priceline Group 0 5 25 0 2.83

The Advisory Board Company currently has a consensus target price of $47.08, suggesting a potential downside of 8.58%. The Priceline Group has a consensus target price of $1,941.35, suggesting a potential upside of 7.70%. Given The Priceline Group’s stronger consensus rating and higher probable upside, analysts plainly believe The Priceline Group is more favorable than The Advisory Board Company.

Valuation and Earnings

This table compares The Advisory Board Company and The Priceline Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Advisory Board Company $797.23 million 2.62 $118.16 million $2.51 20.52
The Priceline Group $11.01 billion 8.05 $4.17 billion $44.31 40.68

The Priceline Group has higher revenue and earnings than The Advisory Board Company. The Advisory Board Company is trading at a lower price-to-earnings ratio than The Priceline Group, indicating that it is currently the more affordable of the two stocks.

Summary

The Priceline Group beats The Advisory Board Company on 13 of the 14 factors compared between the two stocks.

The Advisory Board Company Company Profile

The Advisory Board Company is a provider of software and solutions to the healthcare and higher education industries. The Company offers subscription-based membership programs, software and data-enabled services. All of its programs are rooted in best practices and extends across four areas, including Best practices research, Technology, Data-enabled services and Consulting services. The best practices research and insight programs provide the foundation for all of its other programs. The Company offers technology analytics programs anchored by cloud-based software applications that surface performance improvement opportunities to accelerate progress. Through its consulting services, the Company provides on-the-ground support for performance improvement initiatives, as well as best practice professional management of areas of the hospital or medical group. The Company’s data-enabled services are primarily focused in the area of enrollment management.

The Priceline Group Company Profile

The Priceline Group Inc. is a provider of travel and restaurant online reservation and related services. The Company, through its online travel companies (OTCs), connects consumers wishing to make travel reservations with providers of travel services across the world. It offers consumers an array of accommodation reservations (including hotels, bed and breakfasts, hostels, apartments, vacation rentals and other properties) through its Booking.com, priceline.com and agoda.com brands. Its other brands include KAYAK, Rentalcars.com and OpenTable, Inc. (OpenTable). As of December 31, 2016, Booking.com offered accommodation reservation services for over 1,115,000 properties in over 220 countries and territories on its various Websites and in over 40 languages, which included over 568,000 vacation rental properties (updated property counts were available on the Booking.com Website).

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