HomeAway’s stock price fell nearly 6% and closed at $31.62 on July 10 after a financial analyst wrote that investors’ expectations about the vacation rental company’s new pay-per-booking model may be too hyped up.

HomeAway has traditionally generated the vast majority of its revenue by charging vacation rental owners and professional managers subscriptions to list their properties on HomeAway’s sites, but is in the process this quarter of giving them an alternative — to list for free, but to pay 10% commission per booking.

Lazard Capital Markets analyst Jake Fuller published an investment note yesterday, seeking to tamp down expectations about HomeAway’s (AWAY’s) pay-per-booking model.

“While we are fans of the AWAY team, model and positioning, we struggle with valuation and lofty expectations around a new revenue model,” Fuller wrote. “The new pay-per-booking model may expand AWAY’s revenue opportunity, but we worry it may not be the windfall bulls expect.”

 

In essence, Fuller notes that investors expect HomeAway’s pay-per-booking model to account for $70 to $105 million in revenue from 50,000 tp 75,000 listings by 2015 while Fuller estimates the reality is more likely to be a mere $27 million from 60,000 listings.

“The key difference is that we assume AWAY will generate fewer than its typical 10 transactions and $1,400 as it is dealing with professional managers with multiple distributiion points that may be using AWAY to move off-peak inventory,” Fuller writes.

 

In sum, Fuller likes HomeAway’s move to pay-per-booking as an alternative model, most likely for professionally managed properties rather than vacation rental owners, but believes that investors’ expectations about it are over-ambitious.

Pay-per-booking moves HomeAway into Airbnb territory. While HomeAway will charge property owners who opt for pay-per-booking a 10% commission and won’t levy an additional booking fee for guests, Airbnb charges hosts 3% and guests 6% to 12% per booking.

Fuller maintains a neutral rating on HomeAway’s stock as the company begins in the third quarter to roll out pay-per-booking as a choice for customers. Consumers are unlikely to notice any difference regardless of which model owners use to list their properties unless property owners increase their rates to account for the 10% commission.

A HomeAway spokesperson had no comment on Fuller’s analysis.