Comparing Airbnb With Industry Competitors In Hotels, Restaurants & Leisure Industry

In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Airbnb ABNB in relation to its major competitors in the Hotels, Restaurants & Leisure industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.

Airbnb Background

Started in 2008, Airbnb is the world's largest online alternative accommodation travel agency, also offering booking services for boutique hotels and experiences. Airbnb's platform offered over 7 million active accommodation listings as of Sept. 30, 2023. Listings from the company's over 4 million hosts are spread over almost every country in the world. In the fourth quarter of 2022, 47% of revenue was from the North American region. Transaction fees for online bookings account for all its revenue.

Through a detailed examination of Airbnb, we can deduce the following trends:

• With a Price to Earnings ratio of 16.27, which is 0.44x less than the industry average, the stock shows potential for growth at a reasonable price, making it an interesting consideration for market participants.

• With a Price to Book ratio of 9.4, significantly falling below the industry average by 0.92x, it suggests undervaluation and the possibility of untapped growth prospects.

• The Price to Sales ratio of 9.28, which is 2.98x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.

• The Return on Equity (ROE) of 61.68% is 41.97% above the industry average, highlighting efficient use of equity to generate profits.

• The company has higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.69 Billion, which is 2.09x above the industry average, indicating stronger profitability and robust cash flow generation.

• The gross profit of $2.94 Billion is 1.86x above that of its industry, highlighting stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 17.79% is significantly lower compared to the industry average of 23.3%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

By evaluating Airbnb against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:

• In terms of the debt-to-equity ratio, Airbnb has a lower level of debt compared to its top 4 peers, indicating a stronger financial position.

• This implies that the company relies less on debt financing and has a more favorable balance between debt and equity with a lower debt-to-equity ratio of 0.25.

Key Takeaways

For the PE, PB, and PS ratios, Airbnb appears to be undervalued compared to its peers in the Hotels, Restaurants & Leisure industry. This suggests that the market is not fully pricing in the company's low valuation multiples.

In terms of ROE, EBITDA, and gross profit, Airbnb outperforms its industry peers, indicating strong profitability and operational efficiency.

However, Airbnb's revenue growth is relatively low compared to its competitors in the industry, which may raise concerns about its ability to generate future revenue.

Overall, while Airbnb shows promising financial performance in terms of profitability and valuation multiples, its slower revenue growth may be a point of consideration for industry sector analysis.

This article was generated by Benzinga's automated content engine and reviewed by an editor.