Why Airbnb Analyst Isn't Recommending The Stock Despite One Of The 'Best Marketplace Models In The Internet Sector'

Airbnb Inc ABNB investors are optimistic that the global travel industry recovery in 2022 will kick-start the stock after a lackluster past 12 months. On Tuesday, Bank of America analyst Justin Post said he loves Airbnb's unique business model, but the stock may have limited upside at its current valuation.

Latest Data: Post said the latest data from AirDNA suggests the travel industry in Europe and the rest of the world is growing much faster than the U.S. market, which is coming up on difficult summer comps. He said the mix shift toward international sales will negatively impact Airbnb's average daily rate (ADR), which Post estimates dropped to just 4% growth in the first quarter.

Related Link: Survey: US Travel Demand On The Rise, And Airbnb Could Benefit

Post is now calling for 2022 gross bookings value (GBV) growth of 12% in the U.S., 48% in EMEA, 69% in Asia and 48% in Latin America. He expects ADRs will be slightly up in international markets and flat in the U.S.

How To Play It: In the long-term, Post said he is bullish on Airbnb's business, but investors should wait for a better buying opportunity.

"Airbnb has one of the best marketplace models in the internet sector, and strong bookings trends & continued (AA) demand strength are positives. However, the stock is trading at 11x 2023 P/Sales, at a significant premium vs. OTAs and we believe ADRs will be a modest headwind (but in our estimates)," Post said.

Bank of America has a Neutral rating and a $198 price target for Airbnb.

Airbnb bulls still have several potential catalysts to watch, including an expanding alternative accommodations market, Airbnb market share gains and growing take rates.

Benzinga's Take: Just because an analyst or an investor likes a company's business doesn't make its stock a good investment at any price. While they wait for a better entry point in Airbnb, investors can consider more attractively valued travel stocks that Bank of America recommends to play the 2022 industry recovery, such as Buy-rated Booking Holdings Inc BKNG.