Airbnb Post-Earnings Analysis
Chart done on daily timeframe. It’s always a challenge to identify a healthy valuation for a young company like Airbnb, but now that they’ve had about seven years of public earnings, we’re starting to see what the company is capable of. Since its initial public offering (IPO), Airbnb has grown its annual revenue by 400%, all while slowly crawling their net income to a positive territory. The company’s bookings have grown significantly and leadership is optimistic they’ll continue penetrating international markets in the coming quarters. New international markets means more revenue for the company, and based on the way their leadership have managed revenue in the past, they’ll likely continue growing everything from their income statement to their balance sheet in a healthy direction.
Based on the current stock price and income, the company’s price to earnings ratio is currently around 18 (TTM), falling right in the healthy range of 15-25. However if revenue continues growing as at has, their valuation will actually be considered cheap.
Investors who bought Airbnb since the IPO date haven’t seen much of a return given the pandemic challenges and aftermath that put pressure on the travel industry, but as Airbnb continues delivering strong quarters, we expect the stock price to get a boost too.