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- Two Stocks to Benefit in September: ABNB
Two Stocks to Benefit in September: ABNB
Airbnb's share price was growing rapidly since early summer. A global marketplace, which is familiar to many travellers, climbed from a range between $137 and $139 to nearly $155 within the next three weeks after our recommendation.
The company delivered its Q2 2023 earnings report on August 3. It reported $0.98 of equity per share (EPS) on $2.5 billion revenue, which looked stronger against consensus of about $0.80 of EPS on $2.4 billion revenue. This is especially true if one compares it to $0.48 and $0.18 cents of EPS on $1.8-1.9 billion revenue in the previous two quarters.
The logic of profit-taking on good news led Airbnb to a rollback below $125 per share in the rest of August. However, the business conjuncture remained suitable as renting apartments instead of booking tours helps to save money for families as their incomes are deteriorating amid persistent high inflation, and higher borrowing costs in U.S. Dollars and Euros.
Perhaps, a new wave of Airbnb rally to its higher targets well above $150 just needed a push. And this push happened when S&P Global announced that Airbnb would be included in the S&P 500 list. It would be effective prior to the open of trading on Monday, September 18. The company’s index inclusion may drive significant buying from index funds, which are used to distribute their invested money between the companies from the S&P 500 list in appropriate proportion with each company's caps, as well as numerous investors who scrupulously try to track the S&P 500 structure or even to copy its composition. That's very good for the company, which became public through IPO only in December 2020, and now its market value is more than $90 billion.
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