Don't let it get away!
Help yourself with the Fool's FREE and easy new watchlist service today.
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of HomeAway, (NASDAQ: AWAY.DL ) jumped nearly 16% Thursday after the online vacation rental specialist turned in better-than-expected third-quarter results, and strong forward guidance.
So what: Quarterly revenue rose 23.3%, to $90.1 million, which translated to 35.7% higher adjusted earnings of $0.19 per share. Analysts, on average, were looking for earnings of just $0.16 per share on sales of $89.15 million.
In addtion, HomeAway issued fourth-quarter revenue guidance in the range of $85.5 million to $86.5 million, also exceeding average estimates, which called for Q4 sales of $85.53 million.
Now what: CEO Brian Sharples weighed in: "The second half of 2013 is proving to be a very exciting time for HomeAway. In particular, the third quarter marked several advancements in pursuit of accelerating growth in listings and improving competitive positioning."
To be sure, this quarter was solid for HomeAway, and I'm not surprised by today's pop. But at roughly 45 times next year's earnings estimates, investors should also keep in mind the stock is trading at a premium, even considering its impressive earnings growth. Going forward, while shares could admittedly have some room to run from here, I'd personally prefer waiting for a pullback before stepping in.
$19 trillion industry could destroy the internet
One bleeding-edge technology is about to put the World-Wide-Web to bed. It could make early investors wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism... The Economist is calling it "transformative"... But you’ll probably just call it "how I made my millions." Don't be too late to the party— click here for 1 stock to own when the web goes dark.