ABNB

Wall Street got a new favourite hero in this week of corporate earnings. While the external background has limited further growth in major techs for a while, businesses that directly receive their income from retail clients arrived on the scene. Boosting shares of consumer staples like Walmart, the Coca-Cola Company and McDonald's was followed by even more impressive surging of a vacation home rentals leader Airbnb. The pre-market trading on Valentine's Day, February 14, suddenly revealed a 14% jump in Airbnb's market value.

Waiting patiently for such a pleasant surprise for many months, why not on Christmas Eve, we began to share the reasonable concept of buying this issuer on mid-term expectations since early August. Perceiving Airbnb as the most underestimated asset of the budget-conscious segment was not a mistake, in which investors can be easily convinced by looking at the charts right at the moment. Shares of Airbnb are trading above $160 where the stock was last time detected last May. Fair valuation of the entity came back to provide up to 40% of profit to all those who were clamouring to buy Airbnb on its late summer dips. This happened after the company's quarterly numbers showed a clear booking growth in Latin America and a more stable cross-border travel demand in Europe and Asia Pacific. The Middle Eastern and African customers' activity is following closely behind as well.

Airbnb reported its Q4 2024 EPS (equity per share) of $0.73 to beat average consensus estimates of $0.59. This is extremely great, compared to a shocking $0.55 loss in the same three-month period of 2023. Much water has flowed since that time. Airbnb business metrics are fully revitalized, so that the company is generating good profits for the fourth subsequent quarters in a row. Its Q4 2024 sales came out at $2.48 billion, ahead of expert pool estimates of $2.43 billion and much better than $2.2 billion a year ago. Airbnb CEOs also offered their positive forward guidance for Q1 2025, including sales indications within a range between $2.23 billion and $2.27 billion, against $2.14 in the same quarter of 2024, if we take into consideration that January to March time usually represents a poor period for rentals worldwide. However, the current quarter supposedly offers a 4% to 6% surplus in revenue.

The timing of Easter may promise even more gains, yet we feel that many in the market are ready to partially take profit soon. Price levels above $160 are halfway to testing three-year-old highs for Airbnb around $200, which may be postponed because of unusual one-off activity on a popular asset. Lower interest rates in Europe already begun to help bookings. Cheaper loans in the U.S. are likely to follow in the second half of the year, which will provide some weaker U.S. currency. Too strong U.S. Dollar still puts pressure on sales and also makes it a more expensive procedure when Airbnb converts its booking abroad into dollars.

When calculating the impact of foreign exchange rates, Airbnb said its revenue may increase in the range of 10% to 12% soon. As to the current quarter, Airbnb CEOs expect its Nights and Experiences Booked could be rather flat vs 133 million in the same period of 2024. But later its business metrics are going to benefit from launching its co-host network to allow a manager to take care of guests and the property on behalf of the owner. The program started four months ago and already earned about twice as much as other Airbnb listings. Airbnb is also investing $200 million to $250 million for scaling new businesses in the course of the year.