If Airbnb Is Worth $24 Billion, HomeAway Stock Has Upside

The unicorn startup Airbnb's reported $24 billion valuation suggests there might be big upside to HomeAway, Inc. AWAY, an analyst said Wednesday.

"The valuation gap doesn't make sense," Macquarie's Tom White, who noted a Wall Street Journal report last week that the home-rental site Airbnb expects to soon close a $1 billion funding round at a $24 billion valuation.

HomeAway, with a business model sometimes compared with Airbnb, has a market capitalization of about $2.99 billion.

Airbnb's reported valuation amounts to 27 times its projected 2015 revenue of $900 million, according to White, who noted that HomeAway is trading at about six times its estimated revenue for this year of $495 million.

Airbnb's revenue grew at a compounded rate of 90 percent in the past two years, versus about 30 percent for HomeAway.

But Airbnb's growth is driven by bottom-line losses, whereas HomeAway is "solidly profitable," according to White, who reiterated an Outperform rating and $34 target on HomeAway.

HomeAway shares are nearly unchanged in the past three months and traded recently at $31.51, up $0.03.

Priceline Group Inc PCLN agreed earlier this month to list 200,000 HomeAway properties on Priceline's Kayak site by the end of this year.

Market observers have occasionally speculated that HomeAway could be targeted for acquisition by Priceline, Expedia Inc EXPE or Tripadvisor Inc TRIP.