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

In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Airbnb ABNB alongside its primary competitors in the Hotels, Restaurants & Leisure industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to 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.

By closely examining Airbnb, we can identify the following trends:

• The stock's Price to Earnings ratio of 17.94 is lower than the industry average by 0.48x, suggesting potential value in the eyes of market participants.

• With a Price to Book ratio of 10.36, which is 1.0x the industry average, Airbnb might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.

• With a relatively high Price to Sales ratio of 10.24, which is 3.24x the industry average, the stock might be considered overvalued based on sales performance.

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

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

• Compared to its industry, the company has higher gross profit of $2.94 Billion, which indicates 1.86x above the industry average, indicating stronger profitability and higher earnings from its core operations.

• The company's revenue growth of 17.79% is significantly below the industry average of 23.3%. This suggests a potential struggle in generating increased sales volume.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.

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.

When assessing Airbnb against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:

• Airbnb has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.25.

• This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.

Key Takeaways

For the PE, PB, and PS ratios, Airbnb appears to have a low PE ratio compared to its peers in the Hotels, Restaurants & Leisure industry, indicating potential undervaluation. However, its PB and PS ratios are high, suggesting that the stock may be overvalued based on its book value and sales.

In terms of ROE, EBITDA, gross profit, and revenue growth, Airbnb demonstrates high performance compared to its industry peers. This indicates strong profitability, operational efficiency, and potential for future growth.

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