Why Credit Suisse Is Cutting Targets At HomeAway

In a report published Wednesday, Credit Suisse analyst Stephen Ju commented that

reported a mixed fourth quarter result. HomeAway reported fourth quarter revenue of $109.7 million (versus Ju's estimates of $110.4 million) while adjusted EBITDA was $28.6 million (versus estimates of $28.2 million). The analyst added that listing revenue "modestly" fell short of the $93.5 million estimated as paid listings were three percent below projected. Ju also added that management called out a 100 basis point of margin compression heading into 2015 as it will launch a global marketing campaign to build awareness of its brand. As a result, the analyst lowered his fiscal 2015 earnings per share estimate to $0.60 from a previous $0.74. "HomeAway is a story we have always held hope for a longer-term transition from effectively a classifieds listing to a marketplaces platform," Ju wrote. Looking forward, Ju explained the following factors are crucial to a potential change in investment thesis: 1) Requirements for the majority of listings to be online-bookable by the end of 2016 2) Site features to improve calendar accuracy. 3) Pay per booking initiative. Shares remain Neutral rated with a price target lowered to $32 from a previous $33.