Airbnb (ABNB) Post-Earnings Analysis
Shares of Airbnb plunged to new 52-week lows this morning after the company’s warnings about U.S. demand. Already facing recession fears, investors heard the grim message about demand and immediately hit the sell button, resulting in a 14% single-day decline. Diving into the numbers, Airbnb posted its second-best quarter in terms of bookings, but the number is expected to moderate in the coming quarters. The company’s earnings per share fell below expectations, coming in at $0.86 versus $0.92 expected, but revenue came in line at $2.75B for the quarter.
Despite the earnings drop and the alarming headlines, Airbnb is still an attractive company and remains dominant in its industry with numerous opportunities ahead. The company specifically noted growth in the Asia Pacific and Latin America regions, which can reinforce their global opportunity. The U.S. is not the only market, and companies like Airbnb recognize that long-term success will depend on their ability to continue infiltrating new untapped markets around the globe.
Overall Numbers:
Airbnb’s $72 billion valuation is hefty, but their revenue projections are promising enough to justify it. Last year’s revenue came in at $9.92B, and this year is expected to surpass it. Net income projections are also expected to remain positive, helping the company achieve a more attractive price-to-earnings ratio. Their current P/E is at 16 TTM, which is on the lower end of the attractive 15-25 range.