Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Airbnb Earnings, Future Guidance Impress, But Broad Market Risks Still Loom

By Investing.com (Haris Anwar/Investing.com)Stock MarketsMay 05, 2022 09:00AM ET
www.investing.com/analysis/airbnb-earnings-future-guidance-impress-but-broad-market-risks-still-loom-200623506
Airbnb Earnings, Future Guidance Impress, But Broad Market Risks Still Loom
By Investing.com (Haris Anwar/Investing.com)   |  May 05, 2022 09:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • Airbnb gave a robust sales forecast for the current quarter
  • The booking app predicts “substantial demand” ahead of the busy summer season
  • Despite travel rebound, macroeconomic headwinds have limited stock's gains
  • If you’re interested in upgrading your search for new investing ideas, check out InvestingPro+

Airbnb's (NASDAQ:ABNB) latest earnings report gave its investors several reasons to remain bullish on the stock. The tech platform for vacation home rentals exceeded analysts’ EPS expectations for the three-month period that ended on Mar. 31 and delivered a robust sales forecast for the current quarter. Airbnb closed Wednesday at $156.18.

Airbnb Daily
Airbnb Daily

After more than two years of COVID-19 restrictions, the San Francisco-based company now sees pent-up worldwide demand for leisure traveling heading into the busy summer season.

Those expectations contradict projections that soaring gas prices, air tickets, and other essential commodities would force people to curb spending on non-discretionary items.

Chief Executive Officer Brian Chesky wrote in a letter to shareholders:

“As we lap the beginning of the travel rebound that started last year, we are particularly encouraged by the compounding growth in North America. This year, US domestic demand has outpaced our internal expectations, and we are encouraged by US international bookings exceeding 2019 levels.”

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

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

Airbnb Stock Is Up 120% Since IPO

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

Despite this year’s losses, mainly caused by investors’ exit from growth companies when the Federal Reserve is hiking interest rates, ABNB shares have provided more than 120% gains 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 resulted in people spreading out to thousands of towns and cities, staying for weeks, months, or even entire seasons.

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

“Following 1Q22 results whereby Bookings, Revenue, and EBITDA came in 4%, 3%, and 205% above consensus, respectively, we emerge incrementally confident that Airbnb is taking a share of the global lodging travel market and shares remain our top pick within the online travel vertical.”

These successes, in our view, are unlikely to help trigger another powerful rally in its stock this year as long as the macroeconomic risks linger. Expedia’s stock tumbled more than 17% on Monday even after its earnings report showed an 80% jump in revenue in the first quarter, on concerns about inflation, which is running at its hottest in nearly four decades.

Airbnb stock isn’t cheap when compared with the industry peers. Airbnb sells for about 14 times its sales for the trailing 12-month period. That’s well above the industry average of 5.99. That’s perhaps why more than half of 39 analysts surveyed by Investing.com are not recommending buying the Airbnb stock at this time.

ABNB Consensus Estimates
ABNB Consensus Estimates

Source: Investing.com

Bottom Line

Airbnb’s latest earnings showed that the company remains in a solid position to benefit from the post-pandemic travel rebound. Despite this positive outlook, its shares may not have much more upside room after substantial gains during the past two years. Given higher inflation and rising interest rates, investors remain cautious about growth stocks.

Interested in finding your next great idea? InvestingPro+ gives you the chance to screen through 135K+ stocks to find the fastest growing or most undervalued stocks in the world, with professional data, tools, and insights. Learn More »

Airbnb Earnings, Future Guidance Impress, But Broad Market Risks Still Loom
 

Related Articles

Airbnb Earnings, Future Guidance Impress, But Broad Market Risks Still Loom

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Mohd Izhar Muslim
Mohd Izhar Muslim May 05, 2022 5:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks for the article 💯
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email