HomeAway (AWAY) Highlighted As Today's Perilous Reversal Stock

Trade-Ideas LLC identified HomeAway ( AWAY) as a "perilous reversal" (up big yesterday but down big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified HomeAway as such a stock due to the following factors:

  • AWAY has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $147.0 million.
  • AWAY has traded 251,566 shares today.
  • AWAY is down 4.4% today.
  • AWAY was up 25.3% yesterday.

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More details on AWAY:

HomeAway, Inc., together with its subsidiaries, operates an online vacation rental property marketplace that enables property owners and managers to market properties for rental to vacation travelers. AWAY has a PE ratio of 388. Currently there are 12 analysts that rate HomeAway a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for HomeAway has been 1.1 million shares per day over the past 30 days. HomeAway has a market cap of $3.0 billion and is part of the technology sector and internet industry. The stock has a beta of 1.27 and a short float of 5.1% with 1.27 days to cover. Shares are up 7.6% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates HomeAway as a hold. 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.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.7%. Since the same quarter one year prior, revenues rose by 10.1%. 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.
  • Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.41 is very high and demonstrates very strong liquidity.
  • 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 Software & Services industry and the overall market, HOMEAWAY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $43.80 million or 4.61% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, HOMEAWAY INC has marginally lower results.

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