Embodying the market’s rapid-growth-at-any-cost zeitgeist, lodging website Airbnb (NASDAQ:ABNB) has seen its stock roughly triple to $200 from December’s $68 IPO price. While the stock technically opened for trading closer to $145, ABNB has been a standout performer over the last couple months regardless of how you look at it.
Now, the firm faces its biggest hurdle yet: The first earnings report as a publicly-traded company.
When: Thursday 25 February after the closing bell
Expectations: -$8.41 in earnings per share on $739M in revenues
What to watch from Airbnb earnings
Though ABNB saw its gross booking value (GBV) decline by nearly -40% in the first three quarters of 2020, traders continue to show optimism over the company’s long-term growth potential in a post-pandemic world.
That said, the company has already warned that the virus will weigh on its Q4 results, stating in December that:
"[d]uring the fourth quarter of 2020, another wave of COVID-19 infections emerged. As a result, countries imposed strict lockdowns, in particular in Europe. Similar to the impact of the initial COVID-19 wave in March 2020, we are seeing a decrease in bookings in the most affected regions. As a result, we expect significantly greater year-over-year decline in Nights and Experiences Booked and GBV in the fourth quarter of 2020 than in the third quarter of 2020 and greater year-over-year increases in cancellations and alterations in the fourth quarter of 2020 than in the third quarter of 2020."
Despite this warning, some analysts have argued that Airbnb may be better positioned to navigate the pandemic than many traditional hotel and lodging chains. After all, if you’re going to travel during a pandemic, it may be more appealing to stay in an entirely private home rather than a (relatively) crowded hotel with many of its amenities shut down anyway.
While this narrative is compelling, it’s worth noting that ABNB is already sporting a market capitalization of $120B, substantially more than rivals Marriot International ((NASDAQ:MAR, $47B), Hilton Worldwide ((NYSE:HLT), $34B), and Hyatt Hotels ((NYSE:H, $9B) combined. In other words, traders will need to see a clear vision for the Airbnb to keep growing its market share of the global travel industry to maintain their confidence in the stock.
Airbnb technical analysis
Technical analysis on a two-month old stock is always going to be less reliable, but it is encouraging to see that ABNB has been in a clear uptrend since going public in December. For the past month, the stock has been finding support at the bottom its rising channel and the 100-hour EMA.
With prices currently testing that area as we go to press, there’s potential for a rally toward the center line of the channel in the mid-$200s if Thursday’s release beats expectations. On the other hand, a disappointing earnings report could break the channel and see ABNB drop toward the mid-$100s as investors call the company’s long-term growth prospects into question:
