Airbnb Earnings: Solid Demand and Profitability Set to Continue in 2024; Shares a Touch Rich

We plan to increase our Airbnb $132 fair value estimate by a low-single-digit percentage, after incorporating fourth-quarter revenue growth of 17%, ahead of our 14% expectation and lifting our 2024 sales prognosis to around 13%-14% growth from 10% prior, based on forward commentary. In our view, the 5% pullback in Feb. 13 after-hours trading is a function of elevated expectations—with the stock up 12% year to date and trading about 17% above our valuation before the earnings release—as well as concerns that travel demand is weakening, given guidance that first-quarter room night growth is set to moderate from the 12% level in the fourth quarter. On the latter point, we see decelerating growth as expected and a natural evolution back to normalized levels after a strong recovery in 2020-23. While shares of travel companies could remain choppy over the next few months as investors grapple with the industry's transition to normalized growth, we wouldn't need much discount to our valuation to view shares of this narrow-moat company as attractive.