HomeAway (NASDAQ:AWAY)

CAPS Rating: 3 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.

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Member Avatar JWBuffett (< 20) Submitted: 11/30/2014 9:51:48 AM : Outperform Start Price: $31.39 AWAY Score: -8.40

Homeaway will be acquired by PCLN or Airbnb when they go public. AWAY is cheap when you consider the value of their relationships with individual vacation rental owners (through listings) and professional property managers (through ownership of their property management systems). Recent moves to offer pay for performance / commission based listings should drive growth over the next 2-3 years.

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Member Avatar OklaBoston (68.06) Submitted: 10/26/2014 12:35:25 PM : Underperform Start Price: $33.94 AWAY Score: +20.52

Disappointing Q/Q and overvaluation.

Will need POSITIVE earnings surprises to stay above $10.00

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Member Avatar champstar2 (< 20) Submitted: 10/20/2014 12:50:20 AM : Underperform Start Price: $31.76 AWAY Score: +18.95

Unsustainable growth on a low profit margin.

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Member Avatar benyboy (< 20) Submitted: 8/12/2014 10:22:45 PM : Outperform Start Price: $33.04 AWAY Score: -18.99

cramer-aquisition

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Member Avatar TMFPencils (99.81) Submitted: 7/31/2014 2:29:56 PM : Outperform Start Price: $35.32 AWAY Score: -23.90

HomeAway -- a leading online marketplace of vacation rentals worldwide -- is an interesting business that, at first glance, looks pricey with a P/S of 8.3 and a trailing P/E of 188. On a P/FCF basis, however, HomeAway looks much more reasonable trading at a multiple just over 30. Here are a few other factors that give me optimism about the company over the next several years:

** As of the most recent quarter, sales and adjusted EBITDA are expanding at more than 30% year-over-year.

** The company just crossed 1 million paid listings on its vacation rentals platform, of which 72% were subscription listings paid in advance by property owners. Currently the company’s renewal rate is hovering between 72%-73%.

** Over the past four quarters HomeAway’s core business produced $109 million in free cash flow, providing ample fuel to strengthen the company’s balance sheet, make acquisitions, and continue to invest in the business for future growth.

** The company has $792.5 million in cash and short-term investments and $307.4 million in long-term debt, making for a healthy net cash position of $485.1 million.

** Superb Glassdoor ratings and management. Cofounder and CEO Brian Sharples receives a stellar 94% employee approval rating, with employees rating the company 4.1/5 as a whole. 79% of employees would recommend the company to a friend. Fellow HomeAway cofounder Carl Shepherd remains on board as chief strategy & development officer.

** Growth trajectory in the coming years. HomeAway just created a chief marketing position which will be staffed by Mariano Dima, who brings years of experience from Visa Europe, PepsiCo Latin America, Levi Strauss, and Vodafone. HomeAway has spent the past several years investing in and building its technology and platform, and now the company is placing its efforts behind a new marketing push starting in the remaining months of 2014. This should help drive growth over the next several years.

** Paid listings and visits to HomeAway’s websites continue to grow very quickly. In the most recent quarter (2Q 2014), paid listings increased 34.2% year-over-year while HomeAway’s websites saw a 14.2% year-over-year increase in visits to 229.5 million during the quarter.

Brian Sharples explains that HomeAway’s vision is "to make booking a vacation rental as easy as booking a hotel." Given the company’s success in building a leadership position in the market, coupled with a new marketing strategy that should serve as fuel to propel growth in the coming years, I think we will see HomeAway outperform the market over the next 3-5 years. Visionary and dedicated leadership, a market-leading business, vibrant employee culture, and strong free cash flow production go a long way in my book. Outperform.

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Member Avatar TMFBaldSEO (< 20) Submitted: 6/19/2014 12:34:00 PM : Outperform Start Price: $33.36 AWAY Score: -18.79

Homeaway, in my opinion, is a stock that has a built in safety net. When investing in sub 5b companies, I look for market leaders that have a safety net. For example, AWAY continues to grow listings. To me, that's the safety net. While I believe they're capable of growing on their own, I believe the VR space is one that can be owned by an OTA that acquires AWAY's inventory, and relationships. Coupled with a larger audience, VRs will become a viable option to run alongside hotels as travelers explore alternatives to traditional lodging. In short, I think AWAY is a steal in the mid-low 30s, with some expected volatility along the way.

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Member Avatar WhowasJohnGalt (47.95) Submitted: 4/29/2014 8:26:17 AM : Outperform Start Price: $32.70 AWAY Score: -21.95

growth in online renting of homes for vacation

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Member Avatar coopertown (< 20) Submitted: 6/26/2013 9:22:54 PM : Underperform Start Price: $32.41 AWAY Score: +39.22

PE 154! Next to AirBNB - Homeaway looks more like a myspace.

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Member Avatar alex33chik (< 20) Submitted: 5/4/2013 12:46:07 AM : Underperform Start Price: $29.95 AWAY Score: +31.58

I think it is to high of price

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Member Avatar TMFTypeoh (82.63) Submitted: 4/27/2013 1:00:19 PM : Outperform Start Price: $31.84 AWAY Score: -39.59

Low capital needs, network effect business model with strong growth prospects. My family uses homeaway for vacations, and you can get great properties with kitchens and save a ton of money on food costs alone. Its going to be a bumpy ride, but there is a lot to like.

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Member Avatar pdlpwr62 (94.13) Submitted: 2/1/2013 11:20:15 AM : Outperform Start Price: $23.77 AWAY Score: -15.40

Good balance sheet and insider holding. As people travel look for good places to stay.

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Member Avatar DealLawyer (21.25) Submitted: 11/7/2012 3:53:26 PM : Outperform Start Price: $22.07 AWAY Score: -16.91

Near monopoly in growing vacation rental market. Will be acquired by one of the larger OTAs or Google.

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Member Avatar AdBanker (< 20) Submitted: 11/2/2012 9:58:42 AM : Outperform Start Price: $23.35 AWAY Score: -20.80

Homeaway is undervalued given its position in the evolving vacation rentals market. There is tremendous upside potential here as the company moves to take a % of each reservation transaction instead of just flat rate fees. Homeaway has always been a major revenue driver for vacation rental owners and I think their business model is evolving in a way that will allow them to benefit more from the transactions that occur through their network.

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Member Avatar TMFOpie (96.41) Submitted: 10/12/2012 4:22:51 PM : Outperform Start Price: $27.11 AWAY Score: -37.80

The stock has moved up a little since I first started tracking it but I still believe AWAY has a long runway ahead as it improves its pricing model and builds out its moat. It has some stiff competition from AirBnB and others but I like Away's positioning and this industry is ripe for continued disruption.

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Member Avatar SellAnnoyed (< 20) Submitted: 10/2/2012 9:26:24 PM : Outperform Start Price: $25.00 AWAY Score: -27.16

I use this service for personal, pleasure travel and I am also a subscriber. It kicks @$$ on both sides of the equation.

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Member Avatar iwanna10bagger (76.08) Submitted: 9/29/2012 5:31:54 PM : Underperform Start Price: $25.48 AWAY Score: +50.74

I've rented two vacation rentals - one in Hawaii, and one in Mexico. Both were nice, but both had issues. In one case, the unit had not been cleaned after the previous renter had left. In the other case, I had difficulty getting into the unit when I first arrived. These experiences highlight a problem with vacation rentals - you're not renting from a professional service provider, but rather from a private owner, who, in most cases, lives thousands of miles away. So while I think vacation rentals can provide good value, they can also come with more headaches than hotels. Another issue with vacation rentals is that it appears that, in many cases, the owners are trying to cut costs by not employing someone local to manage their property. Based on my experiences, I'm not sure if I will rent a vacation rental again, and think that the VRBO market growth is somewhat limited. AWAY's market cap is pricing in a great deal of growth, which makes me think it's overvalued.

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Member Avatar joecourt (< 20) Submitted: 10/26/2011 7:00:48 PM : Underperform Start Price: $37.00 AWAY Score: +83.93

seems a bit pricey

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Member Avatar cubanstockpicker (< 20) Submitted: 8/9/2011 11:04:58 PM : Underperform Start Price: $34.14 AWAY Score: +94.78

PE of 153 on a 3 billion dollar company that does the same as time shares. Hmmm.

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Member Avatar Amaretto6 (< 20) Submitted: 8/3/2011 7:14:25 PM : Outperform Start Price: $33.85 AWAY Score: -80.85

Everyone travels (or at least likes to) and hotels are so pricey, most people would much rather have the ability to stay in a roomy apartment/house. Before this the only real alternative was timeshares for family travel. Having been a person that bought one (a timeshare) and regretted it, AWAY provides a better alternative.

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Member Avatar Jeffrey2012 (< 20) Submitted: 7/21/2011 10:16:37 PM : Underperform Start Price: $41.09 AWAY Score: +83.41

Wow. I can't believe people are buying this company up. The hype is so rediculous. They are growing gangbusters because of the rapid acquisitions made. Plus they have goodwill of over 300 million. Does that say over paid?

Also, they have net losses because they are loaded to the hilt with debt and preferred's.

I'm beginning to think people don't even bother opening up the s/1 and reading what's really in there. Seriously, at the torrent growth they are experiencing, they will definitely get hit with the valuation pie in the face as a developmental stage company.

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