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Airbnb Inc.’s resilience in the face of a continued travel slowdown because of the pandemic, as well as its position against peers, led to positive reviews of its first earnings report from analysts and surging share prices Friday.
Airbnb ABNB, +13.34% stock gained as much as 17.6% in Friday’s trading session before ending the day 13.3% higher at $206.35. Shares had their best day since the company’s initial public offering in December, just one day after their worst trading session yet.
The online travel booking site, whose lodging choices consist mostly of homes or rooms in homes, reported earnings results that beat expectations Thursday, prompting analysts such as those at Jefferies to call the company “the best asset in travel.” Jefferies, which has a buy rating on the stock, raised its price target from $182.06 to $210.
Despite a nearly $4 billion loss in the fourth quarter, Airbnb posted revenue, bookings and room-night growth that beat expectations.
“As the company’s first quarter out of the gate, Airbnb displayed its travel demand recovery is nearly double that of its peers with gross bookings -31% vs. 2019 levels compared to Booking at -65% and Expedia at -67%,” Ross Sandler of Barclays wrote in a note to investors, comparing Airbnb to rival online-travel companies Booking Holdings Inc. BKNG, +2.43% and Expedia Group Inc. EXPE, +2.43%. Barclays, which has an equal-weight rating on Airbnb’s stock, raised its price target from $140 to $180.
Sandler is not alone in thinking Airbnb has an advantage over its competitors.
“Airbnb results/guidance stand out in a still very difficult travel environment,” wrote Jake Fuller of BTIG Research, which has a neutral rating on the stock. “We anticipate an ongoing preference for alternative accommodations vs. traditional lodging options this year with still lingering safety concerns.”
Although most analysts were impressed by the company’s results, they have lingering concerns and more tempered suggestions about the stock.
“While we are favorable on Airbnb’s prospects, demand/supply factors and competition could shift significantly exiting the pandemic,” Brian Fitzgerald of Wells Fargo wrote, while also expressing concern about a partial lockup expiration for the stock, which Wells rates as equal weight. “With the stock well above its IPO price, satisfying conditions for the ‘second release window,’ we believe 27.8MM shares will become eligible for sale on Monday 3/1.”
James Lee of Mizuho, which maintained its neutral rating on the stock while raising its price target from $150 to $176, said “We prefer to wait for a more attractive entry point,” while Aaron Kessler of Raymond James wrote, “We believe shares are fairly valued at current levels.”
At least 17 of the 34 analysts tracked by FactSet increased their price targets on the stock after the earnings report, pushing the average price target to $183.96, which is still more than 10% below going rates. The majority analysts consider the stock the equivalent of a hold, with 11 calling it a buy, 20 labeling shares a hold and three rating the stock as sell.
