Airbnb (NASDAQ:ABNB) printed a greater than anticipated set of Q2 2021 earnings final week, though the robust outcomes had been overshadowed by considerations that surging Covid-19 circumstances within the U.S. may affect the corporate’s near-term efficiency.
Over Q2, Airbnb noticed its income rise by virtually 4x in comparison with final 12 months to $1.34 billion, with its internet loss narrowing significantly to about $68 million for the quarter. The underlying tendencies for the enterprise had been additionally robust, with common every day charges for bookings rising to $161, up from $160 in Q1, and up by over 40% year-over-year. Nevertheless, the corporate struck a cautious tone with its near-term outlook. The extremely infectious delta variant of the virus that causes Covid-19 has been spreading within the U.S. and every day circumstances within the nation have surged to ranges of round 130,000 circumstances per day presently, a fourfold improve in comparison with final month. Though Airbnb expects Q3 revenues to be its strongest ever, it has indicated that the variety of bookings for the quarter could be beneath that of Q2 2021, attributable to seasonality and considerations over the present Covid-19 surge. The corporate additionally mentioned that its This fall efficiency would rely upon the progress of vaccinations and the containment of latest virus variants.
Whereas the present virus surge is regarding, we predict that Airbnb is best positioned in comparison with accommodations and different segments of the journey business to sort out an prolonged pandemic. Extra individuals are prone to go for driving holidays, presumably to much less populated areas, whereas planning longer stays as corporations have delayed return to workplace plans. For instance, over Q2, the corporate mentioned that 19% of stays booked on its platform had been for 28 days or extra, with the quantity standing at 24% in Q1. Airbnb’s stock can also be prone to be extra suited to social distancing, in comparison with accommodations which have many frequent areas and this might additionally play to the corporate’s favor.
We worth Airbnb inventory at about $160 per share, about 18x projected 2021 revenues. That is about 8% forward of the present market value. Though there are cheaper methods to play the holiday rental enterprise, through the likes of Expedia (NASDAQ:EXPE) which additionally owns Vrbo, a fast-growing trip rental enterprise, we predict Airbnb’s model and robust development ought to make it a high decide within the house. See our interactive evaluation on Airbnb’s Valuation: Costly Or Low-cost? for extra particulars on Airbnb’s enterprise and comparability with friends.
[7/1/2021] Purchase Airbnb Inventory Forward Of The July Fourth Journey Increase?
Airbnb inventory (NASDAQ: ABNB) has gained about 14% from its lows of close to $134 per share seen in Might, to about $153 per share at the moment, as traders brace for a giant upcycle within the resort business.
The upcoming Independence Day weekend is considered as an inflection level of kinds within the U.S. journey and tourism business’s restoration from the Covid-19 pandemic. About 46% of Individuals at the moment are totally vaccinated towards Covid, and masks mandates have additionally been lifted in a number of vacationer locations, and this might end in important pent-up demand for journey. For perspective, the American Car Affiliation expects that over 47.7 million Individuals might be touring between July 1 and July 5, with journey recovering virtually totally to the pre-pandemic ranges. It’s very probably that demand will stay elevated by the Labor Day weekend in early September as folks profit from the primary summer season put up the Covid lockdowns.
Now, Airbnb may be very properly positioned to benefit from the approaching growth, as we consider that extra folks will go for driving holidays, presumably to much less populated areas, whereas probably planning longer stays – a development that ought to profit vacation-sharing corporations. The corporate has additionally ready for this surge, finishing up some main upgrades to its platform in Might.
That being mentioned, we predict Airbnb inventory appears to be like a bit costly at present costs of over $150 per share, buying and selling at over 17x ahead revenues. There are cheaper methods to play the journey growth. For instance, on-line journey main Expedia (NASDAQ:EXPE) which additionally owns Vrbo, a fast-growing trip rental enterprise, is valued at about $25 billion, or underneath 3x projected 2021 income. Expedia’s income development charges are additionally anticipated to be akin to Airbnb’s (about 60% this 12 months) and it’s really prone to flip a revenue, in contrast to Airbnb which stays within the purple. We worth Airbnb at about $120 per share, or about 15x projected 2021 income. See our interactive evaluation on Airbnb’s Valuation: Costly Or Low-cost? for extra particulars on Airbnb’s enterprise and comparability with friends.
[5/27/2021] What’s Taking place With Airbnb Inventory?
Airbnb inventory (NASDAQ: ABNB) has declined by about 25% during the last month, buying and selling at about $135 per share at the moment. Beneath are a couple of current developments for the corporate and what it means for the inventory.
Airbnb posted a powerful set of Q1 2021 outcomes earlier this month, with revenues rising by about 5% year-over-year to $887 million, as rising vaccination charges, significantly within the U.S., led to extra journey. Nights and experiences booked on the platform had been up 13% versus the final 12 months, whereas the gross reserving worth per evening rose to about $160, up round 30%. The corporate can also be slicing its losses. Adjusted EBITDA improved to unfavourable $59 million, in comparison with unfavourable $334 million in Q1 2020, pushed by higher value administration and the corporate expects to interrupt even on an EBITDA foundation over Q2. Issues ought to enhance additional by the summer season and the remainder of the 12 months, pushed by pent-up demand for holidays and in addition attributable to rising office flexibility, which ought to make folks go for longer stays. Airbnb, specifically, stands to profit from a rise in city journey and cross-border journey, two segments the place it has historically been very robust.
Earlier this week, Airbnb unveiled some main upgrades to its platform because it prepares for what it calls “the most important journey rebound in a century.” Core enhancements embrace better flexibility in looking for reserving dates and locations and a less complicated onboarding course of, which makes it simpler to turn into a number. These developments ought to permit the corporate to higher capitalize on recovering demand.
Though we predict Airbnb inventory is barely overvalued at present costs of $135 per share, the danger to reward profile for Airbnb has definitely improved, with the inventory now down by virtually 40% from its all-time highs seen in February. We worth the corporate at about $120 per share, or about 15x projected 2021 income. See our interactive evaluation on Airbnb’s Valuation: Costly Or Low-cost? for extra particulars on Airbnb’s enterprise and comparability with friends.
[5/10/2021] Is Airbnb Inventory A Purchase At $150?
We famous that Airbnb inventory (NASDAQ: ABNB) was costly throughout our final replace in early April when it traded at near $190 per share (see beneath). The inventory has corrected by roughly 20% since then and stays down by about 30% from its all-time highs, buying and selling at about $150 per share at the moment. So is Airbnb inventory engaging at present ranges? Though we nonetheless consider valuations are wealthy, the danger to reward profile for Airbnb inventory has definitely improved. The inventory trades at about 20x consensus 2021 revenues, down from round 24x throughout our final replace. The expansion outlook additionally stays robust, with income projected to develop by over 40% this 12 months and by round 35% subsequent 12 months.
Now, the worst of the Covid-19 pandemic seems to be behind the USA, with over a 3rd of the inhabitants now totally vaccinated and there’s prone to be appreciable pent-up demand for journey. Whereas sectors corresponding to airways and accommodations ought to profit to an extent, it’s unlikely that they’ll see demand recuperate to pre-Covid ranges anytime quickly, as they’re fairly depending on enterprise journey which may stay subdued because the distant working development persists. Airbnb, then again, ought to see demand surge as leisure journey picks up, with folks choosing driving holidays to much less densely populated places, planning longer stays. This could make Airbnb inventory a high decide for traders trying to play the preliminary reopening.
To make certain, a lot of the near-term motion within the inventory is prone to be influenced by the corporate’s first quarter earnings, that are due on Thursday. Whereas the corporate’s gross bookings declined 31% year-over-year in the course of the December quarter attributable to Covid-19 resurgence and associated lockdowns, the year-over-year decline is prone to reasonable in Q1. The consensus factors to a year-over-year income decline of about 15% for Q1. Now if the corporate is ready to ship a strong income beat and a stronger outlook, it’s fairly probably that the inventory will rally from present ranges.
See our interactive dashboard evaluation on Airbnb’s Valuation: Costly Or Low-cost? for extra particulars on Airbnb’s enterprise and our value estimate for the corporate.
[4/6/2021] Why Airbnb Inventory Isn’t The Finest Journey Restoration Play
Airbnb (NASDAQ: ABNB) inventory is down by shut to fifteen% from its all-time highs, buying and selling at about $188 per share, as a result of broader sell-off in high-growth know-how shares. Nevertheless, the outlook for Airbnb’s enterprise is definitely very robust. It appears moderately clear that the worst of the pandemic is now behind us and there’s prone to be appreciable pent-up demand for journey. Covid-19 vaccination charges within the U.S. have been trending larger, with round 30% of the inhabitants having acquired at the very least one shot, per the Bloomberg vaccine tracker. Covid-19 circumstances are additionally properly off their highs. Now, Airbnb may have an edge over accommodations, as folks go for much less densely populated places whereas planning longer-term stays. Airbnb’s revenues are prone to develop by about 40% this 12 months, per consensus estimates. As compared, Airbnb’s income was down solely 30% in 2020.
Whereas we predict that the long-term outlook for Airbnb is compelling, given the corporate’s robust development charges and the truth that its model is synonymous with trip leases, the inventory is pricey in our view. Even put up the current correction, the corporate is valued at over $113 billion, or about 24x consensus 2021 revenues. Airbnb’s gross sales are prone to develop by about 40% this 12 months and by about 35% subsequent 12 months, per consensus estimates. There are less expensive methods to play the restoration within the journey business post-Covid. For instance, on-line journey main Expedia (NASDAQ:EXPE) which additionally owns Vrbo, a fast-growing trip rental enterprise, is valued at about $25 billion, or simply about 3.3x projected 2021 income. Expedia development is definitely prone to be stronger than Airbnb’s, with income poised to develop by 45% in 2021 and by one other 40% in 2022 per consensus estimates.
See our interactive dashboard evaluation on Airbnb’s Valuation: Costly Or Low-cost? We break down the corporate’s revenues and present valuation and evaluate it with different gamers within the accommodations and on-line journey house.
[2/12/2021] Is Airbnb’s Rally Justified?
Airbnb (NASDAQ: ABNB) inventory has rallied by virtually 55% for the reason that starting of 2021 and at the moment trades at ranges of about $216 per share. The inventory is up a strong 3x since its IPO in early December 2020. Though there hasn’t been information from the corporate to warrant positive aspects of this magnitude, there are a few different tendencies that probably helped to push the inventory larger. Firstly, sell-side protection elevated significantly in January, because the quiet interval for analysts at banks that underwrote Airbnb’s IPO ended. Over 25 analysts now cowl the inventory, up from only a couple in December. Though analyst opinion has been combined, it nonetheless has probably helped improve visibility and drive volumes for Airbnb. Secondly, the Covid-19 vaccine rollout is gathering momentum within the U.S., with upwards of 1.5 million doses being administered per day, and Covid-19 circumstances within the U.S. are additionally on the downtrend. This could assist the journey business finally get again to regular, with corporations corresponding to Airbnb seeing important pent-up demand.
That being mentioned, we don’t suppose Airbnb’s present valuation is justified. (Associated: Airbnb’s Valuation: Costly Or Low-cost?) The corporate is valued at about $130 billion, or about 31x consensus 2021 revenues. Airbnb’s gross sales are prone to develop by about 37% this 12 months. As compared, on-line journey large Expedia (NASDAQ:EXPE) which additionally owns Vrbo, a rising trip rental enterprise, is valued at about $20 billion, or simply about 3x projected 2021 income. Expedia is prone to develop income by over 50% in 2021 and by round 35% in 2022, as its enterprise recovers from the Covid-19 stoop.
[12/29/2020] Decide Airbnb Over DoorDash
Earlier this month, on-line trip platform Airbnb (NASDAQ: ABNB) – and meals supply startup DoorDash (NYSE: DASH) went public with their shares seeing massive jumps from their IPO costs. Airbnb is at the moment valued at a whopping $90 billion, whereas DoorDash is valued at about $50 billion. So how do the 2 corporations evaluate and which is probably going the higher decide for traders? Let’s check out the current efficiency, valuation, and outlook for the 2 corporations in additional element. Airbnb vs. DoorDash: Which Inventory Ought to You Decide?
Covid-19 Helps DoorDash’s Numbers, Hurts Airbnb
Each Airbnb and DoorDash are basically know-how platforms that join patrons and sellers of trip leases and meals, respectively. Trying purely on the fundamentals lately, DoorDash appears to be like just like the extra promising wager. Whereas Airbnb trades at about 20x projected 2021 Income, DoorDash trades at nearly 12.5x. DoorDash’s development has additionally been stronger, with Income development averaging about 200% per 12 months between 2018 and 2020 as demand for takeout soared by the Covid-19 pandemic. Airbnb grew Income at a mean charge of about 40% previous to the pandemic, with Income prone to drop this 12 months and recuperate to shut to 2019 ranges in 2021. DoorDash can also be prone to put up optimistic Working Margins this 12 months (about 8%), as prices develop extra slowly in comparison with its surging Revenues. Whereas Airbnb’s Working Margins stood at round break-even ranges during the last two years, they’ll flip unfavourable this 12 months.
The Airbnb Story Nonetheless Has Enchantment
Nevertheless, we predict the Airbnb story has extra attraction in comparison with DoorDash, for a few causes. Firstly within the near-term, Airbnb stands to achieve significantly from the top of Covid-19 with extremely efficient vaccines already being rolled out. Trip leases ought to rebound properly, and the corporate’s margins must also profit from the current value reductions that it made by the pandemic. DoorDash, then again, is prone to see development reasonable significantly, as folks begin returning to dine in eating places.
There are a few long-term components as properly. Airbnb’s platform scales rather more simply into new markets, with the corporate’s working in about 220 international locations in comparison with DoorDash, which is a logistics-based enterprise that has so far been restricted to the united statesalone. Whereas DoorDash has grown to turn into the biggest meals supply participant within the U.S., with about 50% share, the competitors is intense and gamers compete totally on value. Whereas the limitations to entry to the holiday rental house are additionally low, Airbnb has important model recognition, with the corporate’s identify changing into synonymous with rental vacation properties. Furthermore, most hosts even have their listings distinctive to Airbnb. Whereas rivals corresponding to Expedia wish to make inroads into the market, they’ve a lot decrease visibility in comparison with Airbnb.
General, whereas DoorDash’s monetary metrics at the moment seem stronger, with its valuation additionally showing barely extra engaging, issues may change post-Covid. Contemplating this, we consider that Airbnb may be the higher wager for long-term traders.
[12/16/2020] Making Sense Of Airbnb Inventory’s $75 Billion Valuation
Airbnb (NASDAQ: ABNB), the web trip rental market, went public final week, with its inventory virtually doubling from its IPO value of $68 to about $125 at the moment. This places the corporate’s valuation at about $75 billion as of Tuesday. That’s greater than Marriott – the biggest resort chain – and Hilton accommodations mixed. Does Airbnb – which has but to show a revenue – justify such a valuation? On this evaluation, we take a short take a look at Airbnb’s enterprise mannequin, and the way its Revenues and development are trending. See our interactive dashboard evaluation for extra particulars. In our interactive dashboard evaluation on on Airbnb’s Valuation: Costly Or Low-cost? we break down the corporate’s revenues and present valuation and evaluate it with different gamers within the accommodations and on-line journey house. Elements of the evaluation are summarized beneath.
How Have Airbnb’s Revenues Trended In Latest Years?
Airbnb’s enterprise mannequin is easy. The corporate’s platform connects individuals who need to lease out their properties or spare rooms with people who find themselves in search of lodging and makes cash primarily by charging the visitor in addition to the host concerned within the reserving a separate service charge. The variety of Nights and Experiences Booked on Airbnb’s platform has risen from 186 million in 2017 to 327 million in 2019, with Gross Bookings hovering from round $21 billion in 2017 to about $38 billion in 2019. The portion of Gross Bookings that Airbnb acknowledges as Income rose from $2.6 billion in 2017 to round $4.8 billion in 2019. Nevertheless, the quantity is prone to fall sharply in 2020 as Covid-19 has damage the holiday rental market, with complete Income prone to fall by about 30% year-over-year. But, with vaccines being rolled out in developed markets, issues are prone to begin returning to regular from 2021. Airbnb’s massive stock and inexpensive costs ought to be sure that demand rebounds sharply. We challenge that Revenues may stand at about $4.5 billion in 2021.
Making Sense Of Airbnb’s $80 Billion Valuation
Airbnb was valued at about $75 billion as of Tuesday’s shut, translating right into a P/S a number of of about 16.5x our projected 2021 Revenues for the corporate. For perspective, Reserving Holdings – among the many most worthwhile on-line journey brokers – traded at about 6x Income in 2019, whereas Expedia traded at 1.3x and Marriott – the biggest resort chain – was valued at about 2.4x gross sales previous to the pandemic. Furthermore, Airbnb stays deeply loss-making, with Working Margins standing at -16% in 2019, versus 35% for Reserving and seven.5% for Expedia. Nevertheless, the Airbnb story nonetheless has attraction.
Firstly, development has been and is prone to stay, robust. Airbnb’s Income has grown at over 40% every year during the last 3 years, in comparison with ranges of about 12% for Expedia and Reserving Holdings. Though Covid-19 has hit the corporate laborious this 12 months, Airbnb ought to proceed to develop at excessive double-digit development charges within the coming years as properly. The corporate estimates its complete addressable market at about $3.4 trillion, together with $1.8 trillion for short-term stays, $210 billion for long-term stays, and $1.4 trillion for experiences.
Secondly, Airbnb’s asset-light mannequin must also assist its profitability in the long term. Whereas the corporate’s variable prices stood at about 25% of Income in 2019 (for a 75% gross margin) mounted working prices corresponding to Gross sales and advertising and marketing (about 34% of Revenues) and product improvement (20% of Income) at the moment stay excessive. As Revenues proceed to develop post-Covid, mounted value absorption ought to enhance, serving to profitability. Furthermore, the corporate has additionally trimmed its value base by Covid-19, because it laid off a couple of quarter of its workers and shed non-core operations and it’s potential that mixed with the potential for a powerful Restoration in 2021, earnings ought to search for.
That mentioned, a 16.5x ahead Income a number of is excessive for an organization within the on-line journey enterprise. And there are dangers together with potential regulatory hurdles in massive markets and hostile occasions in properties booked through its platform. Competitors can also be mounting. Whereas Airbnb’s model is powerful and usually synonymous with short-term residential leases, the limitations to entry within the house aren’t too excessive, with the likes of Reserving.com and Agoda launching their very own trip rental platforms. Contemplating its excessive valuation and dangers, we predict Airbnb might want to execute very properly to easily justify its present valuation, not to mention drive additional returns.
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