first earnings report as a public firm is getting five-star evaluations from buyers, as shares of the lodging-reservations platform up greater than 10% on Friday. But many analysts stay cautious on Airbnb inventory given a valuation far above different corporations within the online-travel-agency sector.
The fundamentals within the December quarter have been better-than-expected, although nonetheless clearly impacted by the pandemic. For the quarter, Airbnb (ticker: ABNB) reported income of $859 million, which was down 22% from a yr in the past, however above Wall Street’s consensus forecast of $748 million. Revenue for the total yr was $3.4 billion, down 30%.
Airbnb had a loss for the quarter of $3.9 billion, together with $2.8 billion of stock-based compensation expense. That involves a lack of $11.24 a share, which was worse than the Street consensus forecast for a lack of $9.16 a share. For the total yr, the corporate misplaced $4.6 billion.
The firm stated “nights and experiences booked,” which incorporates room nights plus every seats booked for experiences internet of cancellations, was 46.3 million within the quarter, down 39% from a yr in the past. Gross reserving worth, which incorporates quantities handed by means of to suppliers, was $5.9 billion within the quarter, down 31%.
Airbnb stated it’s “too early” to foretell general restoration developments for 2021. “We have been encouraged by our continued resilience and recovery, and are optimistic about the upcoming travel rebound,” the corporate stated. “However, we continue to have limited visibility for growth trends in 2021 given the difficulty in determining the pace of vaccine rollouts and the related impact on willingness to travel. We are not providing an outlook for the rest of 2021 at this time.”
The tug of conflict right here is between bulls who see Airbnb as a category-dominant participant in various lodging that ought to profit from the reopening of the journey market later within the yr, and skeptics who discover valuation off-putting. While Airbnb trades for about 27 occasions estimated 2021 gross sales,
(BKNG) inventory trades for about 10 occasions gross sales, and
(EXPE) about 3 occasions.
Needham analyst Chris Pierce repeats his Buy score on Airbnb inventory, lifting his worth goal to $225 from $200. “We think a higher premium is warranted given Airbnb’s category-creator/pure-play/scarcity status, along with brand recognition and leadership gap versus peers at tremendous scale,” he writes in a analysis word. “Given company execution through the teeth of the pandemic we don’t want to miss what we consider the best way to play a travel recovery.”
Pierce provides that demand has obtained a lift from a rising variety of use instances, together with the make money working from home development, longer stays and rural leases. But he provides that the corporate nonetheless will get 40% of room nights in city locations. “We think investors can feel comfortable that Airbnb can continue to thrive as more cities open and cross border travel picks up,” he writes.
Other analysts are extra cautious.
BofA Global Research analyst Justin Post retains his Neutral score and $210 goal worth, writing that Airbnb had an “impressive start as a public company,” however that with the inventory buying and selling at 19 occasions his revised 2022 income forecast, and initial-public-offering lock-up expirations nonetheless to return, he’s not recommending the inventory.
Oppenheimer’s Jed Kelly repeats his Perform score, although he’s bullish on the basics. “We see Airbnb generating outsized share gains into a massive recovery that ultimately drives upside to consensus,” he writes, whereas including that “Airbnb is priced at a significant premium to other disruptive internet marketplaces; therefore, we would wait for a better entry point.”
Wells Fargo’s Brian Fitzgerald likewise stays cautious, although he strikes up his goal worth to $200 from $160. “While results and commentary were encouraging, pockets of strength remain oriented toward domestic and rural stays, offering little insight into when and how robustly other key offerings might rebound,” he writes. “While we remain favorable on Airbnb’s prospects…given uncertainties and a premium valuation, we maintain our Equal Weight rating.”
Airbnb inventory is up about 12% to $203.77.
Write to Eric J. Savitz at [email protected]