HomeAway Shares Fall Despite New Buy Rating, $40 Target From UBS

Citing the company's strong position in the growing online vacation rental market and other drivers, UBS analyst Eric Sheridan initiated coverage on HomeAway (Nasdaq: Away) in a report published Tuesday, assigning the stock a Buy rating and a $40 price target. Other favorable factors include potential improvements to the site's offerings, and the refinement of the user interface, which should collectively benefit the site. It is disrupting a market traditionally run by travel agencies, but without future marketing initiatives, it won't be able to achieve favorable growth levels in the medium term. The report also cited that “Our ‘13-'16 Revenue CAGR is 24% (vs. street est. of 23%) - in particular we are bullish on the revenue growth prospects both within the subscriptions (pricing and listings growth upside) and performance based (expands TAM to seasonal renters & larger property managers), with additional upside stemming from potential future initiatives (e.g., in-destination services)”.