CAPS Rating: 2 out of 5

HomeAway’s online catalog links renters with 560,000 vacation properties listings worldwide, disrupting the time-share industry by giving renters the same flexibility as booking a hotel room.


Player Avatar starz188 (99.78) Submitted: 6/30/2011 4:19:44 PM : Underperform Start Price: $39.51 AWAY Score: +35.93

They're not a bad company. They really aren't. But HomeAway is not a $3.2 billion dollar company. They've been steadily growing revenue since 2006 ($17.4M in '06 versus $152.8M in '10), and they finally emerged in the black in 2009 (net income).
For the Q1 2011, HomeAway had net income reported at $1.5M. They have cash on hand, decent assets on the balance sheet, and reasonable liabilities.
However, no matter how much I look at their financials, I just can't see a $3B company!
Not yet, anyway. They have some serious growth potential in Europe, and their renewal rates are rising, along with web traffic. This is a healthy company - just not quite worth the current valuation.

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Member Avatar TMFDukenewkirk (77.92) Submitted: 8/27/2011 8:21:41 PM
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During our last downturn it rapidly became a 2.2 Billion dollar company, would that have been more in your comfort zone? Still lofty to be sure, but I took that as a more comfortable point to pick some up.

Member Avatar starz188 (99.78) Submitted: 9/29/2011 3:45:13 PM
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I actually took another look at AWAY when it hit ~$31 back in August. It's up a little bit from that bottom, but it's valued at $2.66B which still feels high to me. I like their QOQ sales growth, and a debt free company is definitely worth keeping an eye on.

Personally, I would consider real money if their next earnings report shows a more sane price-to-sales ratio. I expect that it will. AWAY has been growing rapidly over the past couple of years, and I don't see much in their way to slow them down. Q2 revenue was 12.9% higher than in Q1, no doubt fueled by summer travel plans. Nevertheless, EPS remains in the red.

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