On the Way to the Recession: Airbnb
Despite
strong financials shares of Airbnb have been trading 40% off their prices from
the beginning of 2022. Thus, investors have a great opportunity to add shares
of the perspective company to their portfolios with a significant discount. The
major bullish driver for Airbnb stocks is the recovery of travel activities. The
number of apartment owners willing to lease their property is constantly rising
and therefore directing more clients to the Airbnb platform. More options for apartment
owners and travelers like Split Stays, AirCover, and simplified searches with
Airbnb Categories, along with professional photo service to owners, could
expand the company’s market share.
The market
positioning of Airbnb seems to be very strong as many people are moving to the online
working format while changing their locations more frequently. This trend
supports the company’s financials as its revenues rose by 70% year-on-year to
$1.51 billion in the first quarter of 2022, beating consensus at $1.45 billion.
Moreover, revenues grew by 80% year-on-year compared to the pandemic-free Q1
2019.
Cooperation
with hotels is another growth source for the platform. Bookings and other
services are charging significant commissions, while hotels are not happy with
it anymore as the number of bookings declined dramatically during the two
pandemic years. Airbnb pioneered cooperation with boutique hotels and may
engage other peers very soon.
The enterprise
value (EV) is at $58.6 billion with expected revenue at $8.2 billion, up by 38%
year-on-year. This puts the forward EV/S at 7.1, which is a very low figure for
a company with such strong financials. Net cash flows over the recent 12 months
were at $2.9 billion; adjusted EBITDA moved to the positive territory for the
first time in the company’s history to $226 million, while the EBITDA margin
was at 15%. The number of booking for the first quarter of 2022 rose by 59% to
102.1 million nights. Booking for the 30+ nights segment grew the most to 20%
of overall bookings.
The
mid-term target price for Airbnd is forecasted above $150 per share.
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