NEW YORK (TheStreet) -- HomeAway  (AWAY) stock is soaring by 22.03% to $39.10 in pre-market trading on Thursday, after the company announced that it will be acquired by Expedia (EXPE) for $3.9 billion in cash and stock. 

Travel website Expedia will pay $38.31 per share for the vacation-rental company, a 20% premium to HomeAway's price at the market close on Wednesday, Bloomberg notes. 

The deal, which is expected to close in the fiscal 2016 first quarter, should earn HomeAway about $350 million in 2018, before taxes, depreciation and amortization, up from $119.3 million in 2014, Reuters reports. 

TheStreet's Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust portfolio, has this to say about the deal: "Brilliant acquisition. Great for all, just hope they get it at that price because I love both companies."

Additionally, yesterday HomeAway reported 2015 third quarter earnings results of 24 cents per share, ahead of analysts' forecast for 21 cents per share. Revenue climbed by 11.6% year over year to $130.7 million for the quarter. 

Further, the stock was downgraded to "hold" from "buy" and its price target was increased to $38 from $37 at Deutsche Bank this morning. The firm noted that the $38 buyout undervalues the business's optionality.

The deal comes with execution risk, but Expedia's expertise tempers the risk and expands distribution while granting the company further flexibility. Even so, competition within the travel industry is not diminishing, Deutsche Bank adds. Other bidders for HomeAway could include Priceline (PCLN) and Airbnb, according to the firm. 

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 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 deteriorating net income, disappointing return on equity and weak operating cash flow.

You can view the full analysis from the report here: AWAY

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Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.