Airbnb Q3 Earnings: Will Travel Industry Recovery Finally Catapult Stock Higher?

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Stocks Analysis by Investing.com (Günay Caymaz) covering: Airbnb Inc. Read Investing.com (Günay Caymaz)'s latest article on Investing.com

in December 2020 and experienced a remarkable surge in its stock price shortly before the outbreak of COVID-19. The allure of Airbnb as a growth stock post-IPO triggered increased demand, propelling its share price to nearly $220 within the initial two months of 2021, representing an impressive 50% gain from its opening price of $146.

Despite achieving profit growth for five consecutive quarters, investors seem to be penalizing the company for its slowed growth. While the gross profit margin has sustained a year-on-year increase of 75%, the ongoing deceleration in sales, despite an 18% increase, is a matter of significant concern, particularly for a company like Airbnb, which is typically perceived as a growth stock.

While a similar decline is expected in the company's revenue in the next 6 months, an increase is expected during the periods when the travel industry reaccelerates.In addition to its services in the US, Airbnb, together with its subsidiaries, offers a pioneering intermediary activity that enables hosts to offer accommodation to tourists around the world. However, as this short-term accommodation model has become popular, the number of competitors has increased considerably.

While this inference remains valid in a downward trend, according to the current price movement, Airbnb can be considered a riskier asset in the index.Fair value analysis for ABNB stock, which is trading at $116 today, reveals that the possibility of a recovery is on the table. So much so that according to the 12 InvestingPro model, the fair value was calculated at $ 135. This shows that the stock remains 16% discounted according to this fundamental analysis.

Accordingly, the downward trend is likely to extend towards the $80 band. However, according to the current outlook and expectations for Q3 earnings to be announced, the stock seems more likely to turn its direction upwards.

 

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