At its current price of about 68, the stock is trading at less than half of its 52-week high of 165, reached in April.
Despite, or perhaps because of, that price decline, five analysts have a "strong buy" recommendation on the stock, while three have issued a "buy" rating. One analyst has a hold on the stock, according to First Call.
"It's one of two stories where we've rated the stock very undervalued," said Lauren Levitan, an analyst with Robertson Stephens who has a "strong buy" on the company.
While a number of tech stocks have recovered from the dog days of August, few have generated as high a ratio of "buy" recommendations as Priceline, according to First Call.
One reason the company's stock has languished is that "people are concerned with competition and the expiration of the lockup period, in which insiders can sell the stock," said Rakesh Sood, an analyst with Goldman Sachs who has a "buy" on the stock.
More than 100 million shares will become available for sale by insiders in the next year, potentially putting pressure on the stock, he noted. Although the number of shares that will be available is unusually high, in most cases insiders do not flood the market all at once, said Bob Gabele, editor of Insiders' Chronicle.
But that's not the only concern analysts have with Priceline.
David Trossman, an analyst with First Union Securities who has a "hold" on the stock, said his concern stems from the company's decision to target only price-sensitive customers. Under the company's business model, customers state a price they are willing to pay for everything from airline tickets to mortgages and Priceline will match the buyer with a vendor willing to accept that price.
"Priceline is positioning itself to the niche customer--the one who is very price sensitive," Trossman said. "Because of that, we don't think it will be as massive a brand as we had hoped for like an Amazon or eBay."
The entrance of a large competitor onto its turf also has hit Priceline's stock. In September, Microsoft announced it will offer a "name your price" service for hotels via its Expedia travel site. Priceline responded earlier this month by filing a lawsuit charging Microsoft with violating its business-model patents.
"This has put pressure on the stock," Levitan said. "The suit will create some new volatility in the stock. Investors were concerned if Priceline would defend its patents, and now that they will, this will alleviate some of the pressure."
Nonetheless, a number of analysts are pleased with the company's fundamentals and the direction it's heading.
"People look at Priceline as an airline ticket company. But they're developing a different model and entering a number of markets where consumers can name their price," Sood said.
The company is expanding beyond airline ticket sales, offering a car rental service this year. It also is looking at licensing its business model to other companies.
Levitan said that the business-to-business transaction arena will be particularly compelling for Priceline.
"This system works for anything where the customer doesn't care about the brand they are buying," she said.
Priceline plans to announce its third-quarter results Thursday. A consensus of analysts expects the company to post a loss of 10 cents a share, according to First Call. Revenues are expected to come in close to $140 million.