Monday, August 10, 2009 Check Out Fundamentals (PCLN) reported much improved results. Everyone cheers and management claims increasing market share and consumer interest in discount off price travel. Sounds good particularly in difficult economic times. So lets take a look at a few metrics that you would not expect from an improving story.

Year over Year cash and equivalents are down by $140 million. For every dollar of stock options exercised they have bought two dollars of their own stock. Stock based compensation expense is approximately 20% of net income. Accounts receivable are up approximately 60% in the past six months yet Q2 revenues are up 17.5%.

Management needs to explain how they will manage these conflicting issues and deliver shareholder value.