On Friday, Phillip Securities adjusted its stance on Airbnb Inc . (NASDAQ: NASDAQ:ABNB), downgrading the company’s stock rating from Neutral to Reduce. The move comes after evaluating Airbnb’s recent price performance, with the research firm maintaining its Discounted Cash Flow (DCF) target price at $112.00. According to InvestingPro data, Airbnb currently trades at a P/E ratio of 31.46x and commands a market capitalization of $78 billion, supporting Phillip Securities’ valuation concerns. This valuation is based on a weighted average cost of capital (WACC) of 7% and a long-term growth rate (g) of 3%.
The downgrade reflects Phillip Securities’ assessment that Airbnb’s stock valuations seem relatively high, particularly when compared to its industry peers. The firm’s fiscal year 2025 earnings per share (EPS) estimate suggests a forward price-to-earnings (P/E) multiple of 34 times, which is a substantial premium over other online travel agencies like Booking Holdings (NASDAQ:BKNG) and Expedia (NASDAQ:EXPE) Group, which trade at 24 times and 12 times their fiscal year 2025 earnings, respectively. InvestingPro analysis reveals that despite impressive gross profit margins of 83.05%, the company’s current valuation multiples across earnings, EBITDA, and revenue remain elevated compared to peers.
Despite maintaining its revenue estimates for Airbnb through fiscal year 2025, Phillip Securities has revised its profit after tax and minority interest (PATMI) projections slightly downward by 3%. This adjustment accounts for an anticipated decrease in interest income for the company.
The analyst at Phillip Securities highlighted the expected earnings growth for Airbnb, projecting approximately 8% year-over-year growth in fiscal year 2025. However, even with this growth rate, the firm suggests that the current stock price does not offer a compelling value when juxtaposed with the expected performance and the valuations of its competitors.
Airbnb’s stock response to the downgrade will be watched closely by investors, especially considering the firm’s position that the stock is trading at a significant premium. The market will continue to monitor Airbnb’s financial performance and its ability to maintain growth in the competitive online travel industry.
In other recent news, Airbnb Inc. has seen a series of adjustments to its stock price targets following its first-quarter results for 2025. DA Davidson reaffirmed a Buy rating with a $155 target, highlighting the company’s performance in foreign exchange-neutral gross bookings and revenue growth, which aligned with forecasts, while adjusted EBITDA exceeded expectations. In contrast, Susquehanna reduced its price target to $150 from $200, maintaining a Positive rating despite noting a softer trend in the U.S. market due to economic uncertainty. UBS also adjusted its price target slightly to $137, citing lower consumer confidence in North America, while maintaining a Neutral rating.
Benchmark decreased its target to $155 from $178 but kept a Buy rating, emphasizing the potential impact of Airbnb’s upcoming Summer Release and experiences offering. Cantor Fitzgerald lowered its target to $100, retaining an Underweight rating, while acknowledging Airbnb’s strong first-quarter EBITDA performance, which surpassed expectations by $60 million. Across these analyses, Airbnb’s management is focused on expanding its offerings and market reach, with new product lines expected to launch soon. Despite some challenges in the U.S. market, the company continues to explore growth opportunities in non-core markets and is considering adding traditional hotel inventory to its platform. The company’s strategic initiatives and market dynamics remain a focal point for analysts as they assess Airbnb’s future prospects.
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