NEW YORK (TheStreet) -- TheStreet's Jim Cramer says Home Away (AWAY - Get Report) has real earnings and a real franchise in its management of vacation rental properties for both property managers and regular customers.
Cramer calls this a powerful concept for a powerful company that does many things right and has 30% growth, but investors still hate the stock. When he sees companies like this with solid balance sheets that are hated, he tells investors not to short the stock. When Home Away comes down to near-market multiple, which is possible in this market, then Cramer suggests buying the stock.
Must Watch: Jim Cramer Says Home Away Has Real Earnings
----------Separately, TheStreet Ratings team rates HOMEAWAY INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate HOMEAWAY INC (AWAY) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 26.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- AWAY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, AWAY has a quick ratio of 1.96, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has slightly increased to $26.37 million or 6.52% when compared to the same quarter last year. Despite an increase in cash flow, HOMEAWAY INC's cash flow growth rate is still lower than the industry average growth rate of 28.22%.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 134.2% when compared to the same quarter one year ago, falling from $4.55 million to -$1.56 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet & Catalog Retail industry and the overall market, HOMEAWAY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: AWAY Ratings Report