Groupon Inc (GRPN), HomeAway, Inc. (AWAY), RetailMeNot Inc (SALE): This Company Saves You Time and Money on Your Online Purchases

This change is now reflected in its operating metrics, with Groupon sourcing less than 45% of its transactions from email in the first quarter of fiscal 2013. Despite this, its financial results remained unsatisfactory, with an 87% drop in quarterly operating income. Looking ahead, Groupon guided for full year fiscal 2013 operating income to exceed $100 million, compared with $99 million in fiscal 2012.

HomeAway, Inc. (NASDAQ:AWAY) is one of the largest online marketplaces for the global vacation rental industry, boasting about 775,000 paid listings of vacation rental homes. Similar to RetailMeNot, HomeAway benefits from network economies, with a broad selection of vacation rental listings attracting more travelers and a large number of website visitors in turn driving more vacation rental listings by property owners.

It delivered a good set of results in the second quarter of fiscal 2013, with total revenue and adjusted EBITDA up 20.9% and 19.3% to $86.6 million and $24.8 million, respectively. Based on the lower end of management guidance, full year 2013 revenue and EBITDA are expected to grow 21% and 20% year-on-year, respectively. However, unlike RetailMeNot, which provides discount coupons for price conscious consumers in a wide variety of product categories, HomeAway’s business is highly cyclical because of the inherent discretionary nature of vacation spending.

Conclusion

RetailMeNot is a proxy for the secular growth in online and mobile commerce, and should benefit from the network effect and operating leverage as it expands further. However, on a trailing twelve month enterprise value-to-revenue (EV/Revenue) valuation basis, RetailMeNot seems expensive at 9.1 times EV/Revenue, compared with EV/Revenue of 1.9 and 7.2 for Groupon and HomeAway, respectively. I will prefer to take a look at the stock again at more reasonable valuation levels.

Mark Lin has no position in any stocks mentioned. The Motley Fool recommends HomeAway. The Motley Fool owns shares of HomeAway.

The article This Company Saves You Time and Money on Your Online Purchases originally appeared on Fool.com and is written by Mark Lin.

Mark is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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