Priceline.com (NASDAQ:PCLN) has grown immensely over the past decade into one of the largest survivors of the dot-com bubble, and it’s not looking to slow down anytime soon. In the past 10 years, its stock has risen at a compound annual growth rate of 26% to $534. Will that rise continue?

People use Priceline to get discounts on airlines, hotels, and rental cars. The company also owns Europe-based Booking.com and South Asia-based Agoda.com. Priceline first became prominent because of its “Name Your Own Price” discount system and marketing campaign which allowed customers to get travel details and discounts based on the price they were willing to pay for their trip.

Here are three strong reasons to buy:

• Strong earnings reports.  Priceline has had solid profit reports for the past four quarters, beating analysts’ expectations each time by an average of 10.7%.

• Solid balance sheet. At 0.3, Priceline has the lowest debt-to-equity ratio in the industry, which is a good sign for its financial strength. It also has relatively low long-term debt at $93.8 million, placing it fourth-lowest among its competitors. This is a good indicator that it should stay financially stable in the future, making it a good pick for long-term investment.
• Out-earning its capital cost. Priceline has earned more operating profit than its cost of capital, however it declined last year due to a big swing in its tax rate. Priceline’s EVA momentum which measures the change in “economic value added” (essentially, profit after deducting capital costs) divided by sales fell 1% in 2010, based on 2009 revenue of $2.3 billion, and EVA that fell from $329 million in 2009 (thanks in part to a tax credit that year) to $314 million in 2010 (on a 29% tax rate), using a 10% weighted average cost of capital.

The biggest reason not to buy Priceline is its price. Priceline’s price-to-earnings-to-growth ratio of 1.47 (where a PEG of 1.0 is fairly priced) means that it is expensive, and considering it is priced at $534, it’s not surprising that its earnings and potential growth are still not enough to make the price reasonable. It currently has a price-to-earnings ratio of 46.9 and is expected to grow 31.8% in 2012.

With Moody’s considering whether to downgrade the U.S.’s debt rating, a stock swoon could present a buying opportunity for shares of this solid performer.

Peter Cohan has no financial interest in the securities mentioned.