Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors, and HomeAway (NASDAQ: AWAY ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
HomeAway is an innovative way to find a place to stay when you travel, giving homeowners the chance to earn income from their properties through short-term vacation rentals. Let's take an early look at what's been happening with HomeAway over the past quarter and what we're likely to see in its quarterly report on Wednesday.
Stats on HomeAway
Analyst EPS Estimate | $0.13 |
Change From Year-Ago EPS | 18.2% |
Revenue Estimate | $70.9 million |
Change From Year-Ago Revenue | 21.2% |
Earnings Beats in Past 4 Quarters | 2 |
Source: Yahoo! Finance.
Will HomeAway put a roof over shareholders' heads this quarter?
Analysts have been very comfortable with their estimates on HomeAway, keeping their earnings-per-share consensus unchanged over the past three months. The stock has risen 17% just since mid-November, as a recovery in the housing market has boosted just about every company related to the industry.
HomeAway is well known among those seeking vacation rentals for its VRBO.com website, which connects owners of vacation properties to potential renters. But with the emergence of a rising number of Web-based travel and real-estate information companies, HomeAway faces huge competition. Zillow (NASDAQ: Z ) has included more long-term rentals among its listings, and vacation properties would be a natural path of further expansion. More directly, TripAdvisor's (NASDAQ: TRIP ) FlipKey service directly competes with HomeAway for vacation rentals and sports a name that many are more familiar with.
HomeAway's growth depends on whether it can entice owners and renters with value-added services. For owners, the ability to pay up to highlight listings and drive traffic could lead to a major source of revenue for HomeAway, while ideas to offer insurance on listed properties would make both parties to rental transactions more secure about using the service.
One big question facing HomeAway is whether travel-portal giant priceline.com (NASDAQ: PCLN ) will seek to enter the business. Priceline hasn't suffered from a lack of growth opportunities, but if it sees opportunity in the space, it could swoop in and cause problems for the business.
Investors should look closely at HomeAway's report for information about new profit-producing offerings from the company. As small as it is, HomeAway needs to demonstrate continued high-paced growth to maintain investor interest.
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