Airbnb (NASDAQ:ABNB) revealed a greater than anticipated set of Q2 2021 earnings final week, though the sturdy outcomes had been overshadowed by considerations that surging Covid-19 instances within the U.S. may influence the corporate’s near-term efficiency.
Over Q2, Airbnb noticed its income rise by nearly 4x in comparison with final yr to $1.34 billion, with its web loss narrowing significantly to about $68 million for the quarter. The underlying developments for the enterprise had been additionally sturdy, with common day by 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 day by day instances within the nation have surged to ranges of round 130,000 instances per day presently, a fourfold enhance 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, as a result of seasonality and considerations over the present Covid-19 surge. The corporate additionally stated that its This fall efficiency would depend upon the progress of vaccinations and the containment of recent virus variants.
Whereas the present virus surge is regarding, we expect that Airbnb is healthier positioned in comparison with inns and different segments of the journey trade to sort out an prolonged pandemic. Extra persons are prone to go for driving holidays, presumably to much less populated areas, whereas planning longer stays as firms have delayed return to workplace plans. For instance, over Q2, the corporate stated 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 inns 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 expect Airbnb’s model and robust progress ought to make it a prime choose within the area. 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 presently, as buyers brace for an enormous upcycle within the lodge trade.
The upcoming Independence Day weekend is considered as an inflection level of types within the U.S. journey and tourism trade’s restoration from the Covid-19 pandemic. About 46% of People 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 Vehicle Affiliation expects that over 47.7 million People will probably be touring between July 1 and July 5, with journey recovering nearly totally to the pre-pandemic ranges. It’s very possible that demand will stay elevated by means of the Labor Day weekend in early September as individuals profit from the primary summer season publish the Covid lockdowns.
Now, Airbnb may be very effectively positioned to benefit from the approaching increase, as we consider that extra individuals will go for driving holidays, presumably to much less populated areas, whereas probably planning longer stays – a development that ought to profit vacation-sharing firms. The corporate has additionally ready for this surge, finishing up some main upgrades to its platform in Might.
That being stated, we expect Airbnb inventory seems to be 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 increase. 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 progress charges are additionally anticipated to be similar to Airbnb’s (about 60% this yr) and it’s really prone to flip a revenue, in contrast to Airbnb which stays within the crimson. 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 Occurring With Airbnb Inventory?
Airbnb inventory (NASDAQ: ABNB) has declined by about 25% over the past month, buying and selling at about $135 per share presently. Under are a number 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 growing by about 5% year-over-year to $887 million, as rising vaccination charges, notably within the U.S., led to extra journey. Nights and experiences booked on the platform had been up 13% versus the final yr, whereas the gross reserving worth per evening rose to about $160, up round 30%. The corporate can also be reducing its losses. Adjusted EBITDA improved to damaging $59 million, in comparison with damaging $334 million in Q1 2020, pushed by higher price administration and the corporate expects to interrupt even on an EBITDA foundation over Q2. Issues ought to enhance additional by means of the summer season and the remainder of the yr, pushed by pent-up demand for holidays and likewise as a result of growing office flexibility, which ought to make individuals go for longer stays. Airbnb, specifically, stands to learn from a rise in city journey and cross-border journey, two segments the place it has historically been very sturdy.
Earlier this week, Airbnb unveiled some main upgrades to its platform because it prepares for what it calls “the largest journey rebound in a century.” Core enhancements embody higher flexibility in trying to find reserving dates and locations and an easier onboarding course of, which makes it simpler to grow to be a number. These developments ought to permit the corporate to raised capitalize on recovering demand.
Though we expect Airbnb inventory is barely overvalued at present costs of $135 per share, the chance to reward profile for Airbnb has definitely improved, with the inventory now down by nearly 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 presently. So is Airbnb inventory engaging at present ranges? Though we nonetheless consider valuations are wealthy, the chance 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 sturdy, with income projected to develop by over 40% this yr and by round 35% subsequent yr.
Now, the worst of the Covid-19 pandemic seems to be behind america, with over a 3rd of the inhabitants now totally vaccinated and there’s prone to be appreciable pent-up demand for journey. Whereas sectors resembling airways and inns ought to profit to an extent, it’s unlikely that they’ll see demand get well 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 individuals choosing driving holidays to much less densely populated places, planning longer stays. This could make Airbnb inventory a prime choose for buyers 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 throughout the December quarter as a result of Covid-19 resurgence and associated lockdowns, the year-over-year decline is prone to average 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 possible 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 Greatest Journey Restoration Play
Airbnb (NASDAQ: ABNB) inventory is down by near 15% from its all-time highs, buying and selling at about $188 per share, because of the broader sell-off in high-growth know-how shares. Nevertheless, the outlook for Airbnb’s enterprise is definitely very sturdy. It appears fairly 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 not less than one shot, per the Bloomberg vaccine tracker. Covid-19 instances are additionally effectively off their highs. Now, Airbnb may have an edge over inns, as individuals go for much less densely populated places whereas planning longer-term stays. Airbnb’s revenues are prone to develop by about 40% this yr, per consensus estimates. As compared, Airbnb’s income was down solely 30% in 2020.
Whereas we expect that the long-term outlook for Airbnb is compelling, given the corporate’s sturdy progress charges and the truth that its model is synonymous with trip leases, the inventory is dear in our view. Even publish 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 yr and by about 35% subsequent yr, per consensus estimates. There are less expensive methods to play the restoration within the journey trade 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 progress 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 examine it with different gamers within the inns and on-line journey area.
[2/12/2021] Is Airbnb’s Rally Justified?
Airbnb (NASDAQ: ABNB) inventory has rallied by nearly 55% for the reason that starting of 2021 and presently 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 factors of this magnitude, there are a few different developments that possible 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 however has possible helped enhance 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 instances within the U.S. are additionally on the downtrend. This could assist the journey trade ultimately get again to regular, with firms resembling Airbnb seeing important pent-up demand.
That being stated, 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 yr. As compared, on-line journey big 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 droop.
[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 huge jumps from their IPO costs. Airbnb is presently valued at a whopping $90 billion, whereas DoorDash is valued at about $50 billion. So how do the 2 firms examine and which is probably going the higher choose for buyers? Let’s check out the current efficiency, valuation, and outlook for the 2 firms 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. Wanting purely on the fundamentals lately, DoorDash seems to be just like the extra promising wager. Whereas Airbnb trades at about 20x projected 2021 Income, DoorDash trades at nearly 12.5x. DoorDash’s progress has additionally been stronger, with Income progress averaging about 200% per yr between 2018 and 2020 as demand for takeout soared by means of the Covid-19 pandemic. Airbnb grew Income at a mean charge of about 40% previous to the pandemic, with Income prone to drop this yr and get well to shut to 2019 ranges in 2021. DoorDash can also be prone to publish constructive Working Margins this yr (about 8%), as prices develop extra slowly in comparison with its surging Revenues. Whereas Airbnb’s Working Margins stood at round break-even ranges over the past two years, they’ll flip damaging this yr.
The Airbnb Story Nonetheless Has Attraction
Nevertheless, we expect the Airbnb story has extra enchantment 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 also needs to profit from the current price reductions that it made by means of the pandemic. DoorDash, then again, is prone to see progress average significantly, as individuals begin returning to dine in eating places.
There are a few long-term components as effectively. Airbnb’s platform scales way more simply into new markets, with the corporate’s working in about 220 nations in comparison with DoorDash, which is a logistics-based enterprise that has so far been restricted to the usalone. Whereas DoorDash has grown to grow to be the biggest meals supply participant within the U.S., with about 50% share, the competitors is intense and gamers compete totally on price. Whereas the limitations to entry to the holiday rental area are additionally low, Airbnb has important model recognition, with the corporate’s title turning into synonymous with rental vacation houses. Furthermore, most hosts even have their listings distinctive to Airbnb. Whereas rivals resembling Expedia wish to make inroads into the market, they’ve a lot decrease visibility in comparison with Airbnb.
Total, whereas DoorDash’s monetary metrics presently 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 buyers.
[12/16/2020] Making Sense Of Airbnb Inventory’s $75 Billion Valuation
Airbnb (NASDAQ: ABNB), the net trip rental market, went public final week, with its inventory nearly doubling from its IPO value of $68 to about $125 presently. This places the corporate’s valuation at about $75 billion as of Tuesday. That’s greater than Marriott – the biggest lodge chain – and Hilton inns mixed. Does Airbnb – which has but to show a revenue – justify such a valuation? On this evaluation, we take a quick have a look at Airbnb’s enterprise mannequin, and the way its Revenues and progress 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 examine it with different gamers within the inns and on-line journey area. 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 wish to lease out their houses or spare rooms with people who find themselves searching for 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.Eight billion in 2019. Nevertheless, the quantity is prone to fall sharply in 2020 as Covid-19 has harm the holiday rental market, with whole 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 giant stock and reasonably priced costs ought to be certain that demand rebounds sharply. We mission 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 lodge 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 enchantment.
Firstly, progress has been and is prone to stay, sturdy. Airbnb’s Income has grown at over 40% every year over the past Three years, in comparison with ranges of about 12% for Expedia and Reserving Holdings. Though Covid-19 has hit the corporate onerous this yr, Airbnb ought to proceed to develop at excessive double-digit progress charges within the coming years as effectively. The corporate estimates its whole addressable market at about $3.Four trillion, together with $1.Eight trillion for short-term stays, $210 billion for long-term stays, and $1.Four trillion for experiences.
Secondly, Airbnb’s asset-light mannequin also needs to 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) fastened working prices resembling Gross sales and advertising (about 34% of Revenues) and product growth (20% of Income) presently stay excessive. As Revenues proceed to develop post-Covid, fastened price absorption ought to enhance, serving to profitability. Furthermore, the corporate has additionally trimmed its price base by means of Covid-19, because it laid off a few quarter of its employees and shed non-core operations and it’s doable that mixed with the opportunity of a powerful Restoration in 2021, income ought to search for.
That stated, a 16.5x ahead Income a number of is excessive for a corporation within the on-line journey enterprise. And there are dangers together with potential regulatory hurdles in giant markets and hostile occasions in properties booked through its platform. Competitors can also be mounting. Whereas Airbnb’s model is robust and usually synonymous with short-term residential leases, the limitations to entry within the area 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 expect Airbnb might want to execute very effectively to easily justify its present valuation, not to mention drive additional returns.
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