Airbnb Inc.
Airbnb, Inc. (NASDAQ: ABNB) is primarily a global marketplace for accommodations and activities. The Company's marketplace approach links hosts and visitors to book venues and experiences all around the world online or via mobile devices. Homes, cabins, treehouses, yachts, castles, and luxury villas are among the offerings. The Company's website and mobile applications provide visitors an entertaining method to browse a range of homes and activities while also making it simple to book them.
Latest News
Q1 FY22 Financial results
Source: Company Filing
Key Risks
COVID: The COVID-19 pandemic and the impact of COVID-19 pandemic mitigation activities have had a substantially negative impact on Airbnb Inc's business, results of operations, and financial condition, and will continue to have a materially negative impact.
Attracting hosts and guests: The company's business, results of operations, and financial condition would be substantially harmed if it failed to retain existing hosts and guests or add new guests and hosts, or if hosts failed to deliver high-quality stays and experiences.
Competition: The business and industry in which Airbnb operates are extremely competitive, and the firm may not be able to compete successfully against existing and future rivals.
Outlook
One year after the century's travel boom began, Airbnb Inc is anticipating another good summer vacation season, with revenue between USD 2.03 billion and USD 2.13 billion expected in Q2 2022. On a year-over-year basis, the business forecasts ADR to be unchanged in Q2 2022. In terms of expenses, Airbnb has made progress in the last two years in terms of lowering per-unit variable costs, improving marketing efficiency, and tightly managing fixed expenses, and the company expects this progress to continue in Q2 2022, resulting in a low double-digit EBITDA margin percentage increase year over year.
Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation
Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation
ABNB's stock price has fallen 41.15% in the past six months and is currently leaning toward the lower end of its 52-week range of USD 111.22 to USD 212.58. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 138.13.
Considering a 41.15% correction in the past six months with expected recovery, record breaking results for the first quarter backed with strong fundamentals, positive outlook, associated risks, and current valuation. We recommend a " Buy" rating on the stock at the current price of USD 113.80, up 2.02% as of May 12, 2022, at 11:00 AM PDT.
One-year technical chart as of 12th May 2022, at 11:00 AM PDT. Source: REFINITIV. Analysis by Kalkine group
Technical Analysis Summary
* Current price as of May 12, 2022, at 11:00 AM PDT.
Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Technical Indicators Defined: -
Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above.
Note 3: The report publishing date is as per the Pacific Time Zone.