UPDATE: SunTrust Starts HomeAway (AWAY) at Buy

(Updated - September 24, 2014 7:27 AM EDT)

SunTrust initiated coverage on HomeAway (NASDAQ: AWAY) with a Buy rating and a price target of $40.00. Analyst Robert S. Peck noted strong financials and compelling valuation. He also sees

"The company has very strong financials, with revenue of $449M growing 30% and EBITDA margins of ~27%. We estimate Revenues can reach $644M in 2016 with margins similar at 27%. We value the company on a Central Tendency of Value basis, that utilizes relative EBITDA and revenue multiples as well as DCF. Our $40 2015 target implies 20x EBITDA and 6x forward revenues," said Peck.

"HomeAway is the leading online vacation rental site, with ~1M listings and ~$10-13B in annual bookings. The company also has a global reach, with top market share in the US, countries across Europe, and Asia Pacific. Globally, we estimate the company has a ~13% market share of vacation bookings, which has expanded behind its ~25% CAGR from 2011 to 2014." he added.

For an analyst ratings summary and ratings history on HomeAway click here. For more ratings news on HomeAway click here.

Shares of HomeAway closed at $33.13 yesterday.

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