Airbnb Will Benefit From 'Healthy' Travel Conditions, Analyst Says Ahead Of Q4 Earnings

Airbnb Inc ABNB will be reporting its fourth-quarter (Q4) earnings on Feb. 13.

Wall Street expects 64 cents in EPS and $2.16 billion in revenues.

Here's what BofA Securities expects from Airbnb’ Q4 earnings report, set for release after market hours.

The Airbnb Analyst: BofA Securities has a Neutral rating on Airbnb stock and a price target of $155 implying negligible upside.

The valuation of Airbnb stock is based on a 20x multiple of 2025E EBITDA, aligning with BofA Securities’ valuation approach for other top travel/transportation picks like Uber Technologies Inc UBER.

Airbnb Investment Thesis: BofA Securities expects Airbnb’s 4Q results to cite strong bookings in November and December. Their analysis suggests potential positive trends in average daily rates (ADRs) and room nights, with an expectation to meet or beat Q4 estimates.

“We saw a pickup in travel trends (with healthy ADRs), since Airbnb guided in early November, and AirDNA’s estimates suggest some upside in 4Q,” the analysts wrote.

One key highlight is the revision of 2024 estimates, attributable to anticipated benefits from cross-currency transaction fees. BofA Securities raised revenue estimates for Q2 to Q4 2024 by $270 million, factoring in higher ADRs and changes to guest fees.

Airbnb’s high take rates and financial discipline are seen as a potential positive, along with the prospect of increased revenues from new fee structures.

Despite acknowledging positives such as Airbnb’s growing market share against hotels, strong supply growth, and pricing power, BofA Securities maintains a Neutral rating based on concerns. The analysts express caution about:

• The potential deceleration in the industry in 2024,
• ADR headwinds,
• Strong competition from Booking Holdings Inc BKNG and Expedia Group Inc EXPE promoting Vrbo,
• New urban regulations affecting Airbnb listings, and
• The stock’s valuation premium compared to online travel agency (OTA) peers.

Also Read: Booking & Expedia Gain Outperform Rating: Read How These Online Travel Stocks Stand Under This Analyst’s Radar

BofA Securities remains cautious of the perceived risks in the industry’s trajectory for 2024 and valuation concerns. Investors are advised to weigh potential upside against perceived risks when evaluating San Francisco-based Airbnb as an investment opportunity.

 ABNB Price Action: Airbnb stock was trading at $154.51 at the time of publication.

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