Takeaway: Inconclusive but at a minimum suggests that the deceleration in RN growth is moderating. But we may sit this one out again

PCLN - Long Bench

KEY POINTS

  1. Volume Tracker inconclusive, but points to stabilization: The tracker is mostly for directional purposes (accel vs. decel) since there is greater volatility in its growth rates vs. PCLN's room nights (compare axes in chart below).  It's pointing to a mild deceleration 4Q17 TD, but is also registering the smallest absolute rate of change that we've seen in that time series, so we have less confidence directionally into 4Q. The only thing we can say is that RN growth appears to be stabilizing.
  2. Tricky setup into the print.  Consensus still isn't offering as much breathing room as we would like, which is what has kept us out of the name.  The bigger issue is that the buyside appears to be grasping for a narrative to explain the deceleration in RN growth (VR, China, meta, etc), even though the most likely explanation is a fleeting headwind from EXPE.  Still, if PCLN misses on it RN guide for the 3rd consecutive print, we suspect the stock will give back much of its recent gains.   

Ticker Bullets | PCLN Tracker Update - PCLN   Volume Tracker 10 19 17

Let us know if you have any questions or would like to discuss further.

Hesham Shaaban, CFA
Managing Director


@HedgeyeInternet 

Todd Jordan
Managing Director


@HedgeyeSnakeye 

Sean Jenkins
Associate