NEW YORK (TheStreet) -- HomeAway
(AWAY - Get Report) shares are falling, down -2.88% to $30.30, in pre-market trading on Thursday following a downgrade to "neutral" from "overweight" by analysts at JPMorgan
(JPM - Get Report).
The firm lowered its price target on the shares by 22% to $38 from $49.
JPMorgan cited increased spending on marketing as a reason for the lowered outlook.
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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:
- The revenue growth came in higher than the industry average of 4.3%. Since the same quarter one year prior, revenues rose by 33.0%. 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.
- The gross profit margin for HOMEAWAY INC is currently very high, coming in at 85.96%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 4.20% is above that of the industry average.
- Net operating cash flow has slightly increased to $39.97 million or 6.63% when compared to the same quarter last year. Despite an increase in cash flow, HOMEAWAY INC's average is still marginally south of the industry average growth rate of 16.41%.
- 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 decreased by 16.1% when compared to the same quarter one year ago, dropping from $5.30 million to $4.44 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