HomeAway, Inc. (AWAY)’s ‘Buy’ Rating from UBS (UBS) Should Be Watched Closer

HomeAway, Inc. (NASDAQ:AWAY), an online marketplace for vacation rental, earned a positive review from analysts at UBS AG (NYSE:UBS). They placed a “buy” recommendation on the stock and issued a target price of $40. CNBC’s Jim Cramer and “Squawk on the Street” crew weighed in on the development and also talk about Priceline Group Inc (NASDAQ:PCLN), an online reservations company that posted beating results on Monday, citing why HomeAway could be its buyout target.

Interestingly, even with a positive review from UBS AG (NYSE:UBS), shares of HomeAway, Inc. (NASDAQ:AWAY) continue to trend downward. In fact, the stock is down more than 19% this year.  The fact that investors seem not to take into consideration the bullish recommendation on HomeAway is something that surprised Cramer. “Here is a recommendation that is not getting any love, but, I think, it should. This is UBS recommending HomeAway […],” he said.

In the bullish rating of the stock of HomeAway, Inc. (NASDAQ:AWAY), UBS AG (NYSE:UBS) analyst Eric J. Sheridan identified various strengths of the company. For example, he thinks the company provides investors with great exposure to a leading player in the online vacation rental market, which is growing fast.

They also see multiple opportunities for HomeAway, Inc. (NASDAQ:AWAY) in property listings expansion, upside in pricing and enhancement of user experience.

On “Squawk on the Street,” Cramer continued to explain his love for HomeAway, even calling it “Priceline Group Inc (NASDAQ:PCLN) for the rentals.” He doesn’t see it impossible that Priceline may someday think about acquiring the company. Cramer also cited the incredible leadership at HomeAway. He went on to warn against betting against companies like HomeAway, Inc. (NASDAQ:AWAY), which said to be the Internet at its best. Such are stocks that have the potential of paying off handsomely given their great opportunities in the global market.

“I don’t know why the stock is lower; it shouldn’t be down. This is a very powerful recommendation, and I really like it,” Cramer stated.

Disclosure: none