Company Reports

We think that Airbnb's global online travel agency, or OTA, position will strengthen over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of over 5 million hosts and cumulative 1.5 billion guest arrivals since its start in 2008 through 2023. We think this network advantage will be supported by generative artificial intelligence investment and expansion into the experiences vertical and international markets over the next several years. Also, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 104 markets versus 28 for Expedia and 149 for Booking Holdings, according to App Annie on Feb. 17, 2024. Further, we expect some durability in remote working to enhance long-term travel demand.

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.

We think that Airbnb's global online travel agency, or OTA, position will strengthen over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of over 4 million hosts and cumulative 1.4 billion guest arrivals since its start in 2008 through 2022. We think this network advantage will be supported by generative artificial intelligence investment and expansion into the experiences vertical over the next several years. Also, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 92 markets versus 23 for Expedia and 134 for Booking Holdings, according to App Annie on Oct. 30, 2023. Further, we expect some durability in remote working to enhance long-term travel demand.

We don’t expect to materially change our $132 fair value estimate for narrow-moat Airbnb after the company reported slightly better third-quarter results and guided its fourth-quarter sales in line with our forecast.

We think that Airbnb's global online travel agency, or OTA, position will strengthen over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of over 4 million hosts and cumulative 1.4 billion guest arrivals since its start in 2008 through 2022. We think this network advantage will be supported by generative artificial intelligence investment and expansion into the experiences vertical over the next several years. Also, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 100 markets versus 25 for Expedia and 152 for Booking Holdings, according to App Annie on Aug. 3, 2023. Further, we expect some durability in remote working to enhance long-term travel demand.

We plan to lift our narrow-moat Airbnb $128 fair value estimate by around a low-single-digit percentage, to account for stronger near-term demand, leaving shares slightly overvalued.

We think that Airbnb's global online travel agency, or OTA, position will strengthen over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of over 4 million hosts and cumulative 1.4 billion guest arrivals since its start in 2008 through 2022. We think this network advantage will be supported by generative artificial intelligence investment and expansion into the experiences vertical over the next several years. Also, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 793 markets versus 28 for Expedia and 153 for Booking Holdings, according to App Annie on May 3, 2023. Further, we expect some durability in remote working to enhance long-term travel demand.

We think that Airbnb's global online travel agency, or OTA, position will strengthen over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of over 4 million hosts and cumulative 1.4 billion guest arrivals since its start in 2008 through 2022. We believe this network advantage will be supported by generative artificial intelligence investment and expansion into the experiences vertical over the next several years. Also, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 793 markets versus 28 for Expedia and 153 for Booking Holdings, according to App Annie on May 3, 2023. Further, we expect some durability in remote working to enhance long-term travel demand.

Narrow-moat Airbnb shares fell more than 10% after hours as 14% second-quarter sales growth guidance (at the midpoint) came below FactSet consensus expectations of 15% (our estimate was 14%), and the company mentioned near-term elevated marketing investment. We see neither of these as a reason to lower our forecast or $127 per share fair value estimate, leaving shares slightly undervalued.

Our view of Airbnb’s network advantage (source of its narrow moat) has become more optimistic since its December 2020 public offering. Specifically, Airbnb has seen a strong sales recovery in its core alternative accommodations market, and we have less pause that its lack of traditional hotel content poses a competitive challenge. Shares trade at a slight discount to our unchanged $127 fair value estimate.

We think that Airbnb's global online travel agency, or OTA, position will strengthen over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of over 4 million hosts and cumulative 1.4 billion guest arrivals since its start in 2008 through 2022. We believe this network advantage will be supported by continued expansion into the experiences vertical over the next several years. Moreover, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 74 markets versus 26 for Expedia and 145 for Booking Holdings, according to App Annie on March 18, 2023. Further, we expect some durability in remote working to enhance long-term travel demand.

We think that Airbnb's global online travel agency, or OTA, position will maintain over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of over 4 million hosts and cumulative 1.4 billion guest arrivals since its start in 2008 through 2022. We believe this network advantage will be supported by continued expansion into the experiences vertical over the next several years. Moreover, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 95 markets versus seven for Expedia and 120 for Booking Holdings, according to App Annie on Feb. 14, 2023. Further, we expect some durability in remote working to enhance long-term travel demand.

Airbnb shares booked about 10% higher in afterhours trading, primarily driven, we believe, by stronger profitability in 2022’s fourth quarter. We plan to lift our $117 fair value estimate by a high-single-digit percentage to account for stronger EBITDA over our 10-year forecast and time value. We see Airbnb as a company with strong revenue and EBITDA growth prospects, although already reflected in its share price.

We think that Airbnb's global online travel agency, or OTA, position will maintain over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of 4 million hosts and cumulative over 1 billion guest arrivals since its start in 2008 through 2021. We believe this network advantage will be supported by continued expansion into the experiences vertical over the next several years. Moreover, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 87 markets versus 22 for Expedia and 156 for Booking Holdings, according to App Annie on Nov. 3, 2022. Further, we expect some durability in remote working to enhance long-term travel demand.

We think the mid-single-digit drop in narrow-moat Airbnb shares after hours is tied to overblown concern of decelerating sales growth, as demand remains at an extremely high level. In fact, we expect our Airbnb $113 valuation to travel higher by a low-single-digit percentage to account for stronger near-term demand and profitability relative to our forecast, leaving shares trading at a slight discount.

Despite enduring travel demand into the fall of 2022 and our view that it can continue into 2023, investor concerns around future trips and credit availability have grounded share price performance across the industry. As a result, we see meaningful opportunities to book investment stays in Sabre, Accor, Booking Holdings, and Norwegian, which trade at 64%, 42%, 44%, and 54% discounts to our $15, EUR 37.50, $2,900, and $28 fair value estimates, respectively.

We think that Airbnb's global online travel agency, or OTA, position will maintain over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of 4 million hosts and cumulative over 1 billion guest arrivals since its start in 2008 through 2021. We believe this network advantage will be supported by continued expansion into the experiences vertical over the next several years. Moreover, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 97 markets versus 25 for Expedia and 149 for Booking Holdings, according to App Annie on Aug. 1, 2022. Further, we expect some durability in remote working to enhance long-term travel demand.

Narrow-moat Airbnb shares traveled lower by about 10% after hours as signs of near-term peak demand emerged. We plan to lower our $116 valuation on Airbnb by a mid-single-digit percentage, leaving shares appropriately valued.

We maintain that Airbnb's global online travel agency, or OTA, position will maintain over the next decade, driven by a leading alternative accommodation network (source of its narrow moat) of 4 million hosts and cumulative over 1 billion guest arrivals since its start in 2008 through 2021. We believe this network advantage will be supported by continued expansion into the experiences vertical over the next several years. Moreover, Airbnb is positioned to benefit from the ongoing shift to mobile bookings, witnessed by Airbnb being a top-10 iPhone travel app in 94 markets versus 18 for Expedia and 147 for Booking Holdings, according to App Annie on May 2, 2022. Further, we expect some durability in remote working to enhance long-term travel demand.

Narrow-moat Airbnb’s first-quarter results and 2022 guidance were near our existing forecast, and we don’t expect a material change to our $114 fair value estimate, leaving shares overvalued. Gross bookings were $17.2 billion versus our $17.1 billion estimate, representing 173% of 2019 levels. Gross booked nights were 102.1 million compared to our 101.5 million forecast, equating to 126% of prepademic levels. Average daily rate was in line with our model at $168, coming in at 137% of 2019 levels.