December 6, 2021

Tomer Aiderapp

Consummate Business Technicians

Airbnb expected to solidify its position as travel business rebounds

As travel continued to rebound in the third quarter, Airbnb Inc. is believed to have bolstered its direct in the increasing market place of option lodging.

Cowen analysts, who say “the manufacturer is synonymous with the category,” estimate that Airbnb
ABNB,
-.99%
commands far more than 50% of substitute-lodging bookings such as dwelling and apartment rentals. They also wrote in a take note to buyers that they estimate the alternative group has risen from comprising 24% of world-wide lodging pounds pre-pandemic to 33% currently.

There’s loads a lot more optimism about the category, this kind of as from JMP Securities, which famous that 19% of tourists stayed in a “vacation rental” for the 1st time throughout the pandemic: “As travel demand normalizes, we be expecting Airbnb, Vrbo (Expedia
EXPE,
-4.42%
), and alternate accommodations broadly to be extensive-term beneficiaries of COVID-19.”

See also: Is that Airbnb much too expensive? CEO options ‘systematic update on pricing’ as journey recovers

Early indications of a travel restoration from the coronavirus pandemic include earnings benefits from travel-lookup platform Trivago
TRVG,
-4.55%,
which defeat anticipations Monday on the energy of travel in Europe and the Americas but cautioned that the travel restoration flattened in Oct in contrast with the summer months mainly because of remaining limitations.

Naved Khan, analyst for Truist Securities, mentioned in a note to traders Monday that he sees the “European vacation restoration in 3Q a optimistic for Airbnb, given that the firm generated ~40% of its revenue from EMEA in 2019 (with Europe getting the major component, we believe that).”

Airbnb is scheduled to report third-quarter earnings Thursday following the stock marketplaces shut.

What to assume

Earnings: Analysts surveyed by FactSet on common expect Airbnb to submit net earnings of 72 cents a share, or $477 million. The average expectation of analysts, hedge-fund supervisors, executives and a lot more as collected by Estimize is 75 cents a share.

Earnings: Analysts on ordinary be expecting revenue of $2.06 billion, when compared with $1.34 billion in the calendar year-ago quarter, in accordance to FactSet. Estimize is guiding for $2.07 billion.

Stock motion: Airbnb’s shares have risen all a few situations following it noted earnings considering that it went community final December. Airbnb inventory is up approximately 18% so significantly this 12 months as a result of Monday’s session, when the S&P 500 index 
SPX,
+.37%
has obtained more than 22%.

What analysts are expressing

“Airbnb’s growth in 2021 is arguably additional remarkable offered we consider two of its strongest types, worldwide and city marketplaces, are working underneath 2019 stages,” KeyBanc analyst Justin Patterson wrote in a take note to buyers. “As vaccination costs enhance, we anticipate global and urban energy could give incremental growth for Airbnb.”

Past earnings protection: Airbnb outperforms pre-pandemic final results, but forecast suggests it may perhaps not past

In Cowen’s observe to traders, analyst Kevin Kopelman wrote that he viewed the consensus that Airbnb’s bookings will gradual to about 17% expansion in 2022 as “an unrealistic rate of slowdown,” mainly because “alternative [lodging] has professional a lasting move-up in the blend.”

He also claimed there is a good deal of space for Airbnb bookings to grow, due to the fact “major Airbnb geographies [Europe, the Middle East and Africa; Asia Pacific and Latin America] and segments (city), each individual representing about 60% of ABNB’s pre-pandemic organization, have been drastically depressed all over 21E.”

Out of 36 analysts surveyed by FactSet, 17 have a acquire score on Airbnb inventory, while 14 have a maintain score, three say promote and two amount the stock at overweight. The normal price tag goal as of Monday was $178.67.