Airbnb: Results and forecasts impress, but risks persist |

  • Airbnb gave a robust sales forecast for the current quarter.
  • The booking app predicts “substantial demand” as the busy summer season approaches.
  • Despite the rebound in travel, macroeconomic headwinds limited the stock’s gains.
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Airbnb’s (NASDAQ:) latest quarterly report gave its investors several reasons to remain optimistic. The vacation home rental technology platform beat analysts’ earnings-per-share expectations for the three-month period ending March 31 and delivered a robust sales forecast for the current quarter. Airbnb closed Wednesday at $156.18.

After more than two years of COVID-19 restrictions, the San Francisco-based company is now seeing pent-up global demand for leisure travel as the busy summer season approaches.

These forecasts run counter to projections that soaring prices for gasoline, airline tickets and other basic commodities will force people to cut non-discretionary spending.

Chairman and CEO Brian Chesky wrote in a letter to shareholders:

“While we are at the start of the rebound in travel that began last year, we are particularly encouraged by the cumulative growth in North America. This year, US domestic demand has exceeded our internal expectations, and we are encouraged by U.S. international bookings that exceed 2019 levels.”

According to Airbnb’s latest forecast, second-quarter revenue will be between $2.03 billion and $2.13 billion. According to data compiled by Bloomberg, that topped analysts’ average estimate of $1.97 billion.

In the first three months of the year, revenue was also better than expected, which helped narrow the net loss to $19 million from $1.2 billion in the same quarter a year earlier. . Airbnb reported 102.1 million nights and experiences booked for the first quarter, surpassing pre-pandemic levels.

Airbnb stock is up 120% since its IPO

Airbnb stock has lost about 9% this year, losing about half of its close rivals. Expedia (NASDAQ:) and Booking Holdings (NASDAQ:) suffered over the same period.

Despite this year’s losses, mainly caused by investors exiting growth companies when the Federal Reserve raises interest rates, ABNB shares have provided gains of more than 120% since its IPO in 2020 This strength reflects the company’s success in managing the challenges posed by the pandemic.

The app quickly took advantage of the flexibility offered by new remote work policies that saw people dispersed to thousands of cities, staying for weeks, months, or even entire seasons.

Citi analysts reiterated the ABNB buy in a note released today, saying they believe the stock will continue to benefit from rising travel demand.

“After Q1 22 results, where bookings, revenue and EBITDA beat consensus by 4%, 3% and 205%, respectively, we are increasingly confident that Airbnb is in taking a share of the global travel and accommodation market and that the stock remains our best choice in the online travel sector.

In our view, these successes are unlikely to help trigger another powerful rally in its stock this year, as long as macro risks persist. Expedia’s stock fell more than 17% on Monday, even after its results showed an 80% jump in first-quarter revenue on worries about inflation, which reached its highest level in nearly four decades.

Airbnb stock is not cheap compared to industry peers. Airbnb sells for about 14 times its revenue over the last 12 months. That’s well above the industry average of 5.99. This may be why more than half of 39 analysts polled by do not recommend buying Airbnb stock at this time.

ABNB Consensus of analysts

ABNB Consensus of analysts

Conclusion: What to think of the Airbnb stock?

Airbnb’s latest results showed the company remains in a strong position to benefit from the post-pandemic rebound in travel. Despite this positive outlook, its shares may not have much room for improvement after the substantial gains recorded over the past two years. Given rising inflation and rising interest rates, investors remain cautious about growth stocks.

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Airbnb: Results and forecasts impress, but risks persist |