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Airbnb (ABNB - Free Report) is a Zacks Rank #1 (Strong Buy) that is a leading platform for unique stays and experiences.The company's marketplace model connects hosts and guests online or through mobile devices.
The stock is coming off 2023 highs after a very positive earnings report. Airbnb has rallied over 70% off its December lows, so investors can’t be blamed for taking profits into the up move.
Going forward there is a strong argument that dips should be bought and the recent quarter supports that idea. Additionally, analyst estimates are being raised across all time-frames.
About the Company
Airbnb was founded in 2007 in San Francisco, CA. The company offers private rooms, primary homes, or vacation homes by connecting the host and the guest.
The stock has a Zacks Style Score of “A” in Value and Growth, but “F” in Value. The valuation is an issue for some investors as its PE is over 40.
Airbnb currently employs 6,800 and has a market cap of $83 billion. It pays no dividend.
Q4 Earnings Beat
In mid-February, the company reported an earnings beat of 78%. This was the 7th straight EPS beat, a streak that started back in Q3 of 2021.
Looking at the quarter, the company reported EPS of $0.48 v the $0.27 expected. Revenues came in at $1.90, which was slightly better than expected. Gross Booking Value came in at $13.5B, which was up 26% y/y. Adjusted EBITDA was $506M v the $333M last year and margins were 27%.
Q1 guidance was raised to a range of $1.75-1.82B v the 1.68B expected. The company said that FY23 EBITDA margin is “to be maintained”. Airbnb pointed out that Q1 of last year was impacted by the Omicron spread, so year over year comps were easily beat.
Management added that for the rest of 2023 “we expect to maintain the strong Adjusted EBITDA margin we delivered in 2022, as we offset the headwinds from lower ADR with incremental variable cost efficiencies and fixed cost discipline”.
The quarter was not only a pleasant surprise for investors, but analysts also got bullish. Since the report, analysts have aggressively hiked estimates and price targets.
Analyst Estimates
Looking at analyst estimates since earnings, we see numbers going higher across all time frames.
Over the last 7 days, estimates for the current quarter have gone from $0.00 to $0.14. For next quarter, we see a 16% jump over that same time frame.
Looking at the bigger picture and the current year, we see estimates heading 20% higher over the last month. Analyst have hiked from $2.80 to $2.86 before earnings, but then took that number up to $3.38 after earnings.
For next year, we have seen estimates over the last month go from $3.56 to $4.04. This is a move higher of 13%.
In addition to hiking estimates, analysts were quick to lift their price targets for ABNB. JPMorgan went from $105 to $135. UBS went from $114 to $130. Credit Suisse is one of the most bullish on the street, with a $160 target on the stock.
The Technicals
The stock jumped from $120 to $144 after the earnings announcement. This 20% move higher was on top of the stock's gain of 20% already on the year before the earnings report. From lows of 2022 to the recent highs, we are talking about a 75% move in just a couple months.
So it was no wonder that the stock was sold as profit takers stepped in. But investors that missed this move are wondering where they can buy a dip, instead of chasing. Let’s go over some levels that potential bulls should be watching.
The gap fill would be $121, which could be followed up with a test of the 21-day MA. This level is currently at $116 and in between those levels would be a great place for a starter position.
The 200-day moving average has been known to be tested in the current market environment, especially after a big earnings move like we just saw. Bulls should be ready to buy this level, which is currently just under $108.
For those waiting for Fibonacci levels, your halfway back is $112.50 and the 61.8% retracement is $105.
Bottom Line
Airbnb has had a massive move, which is causing some investors to take profits. However, the momentum is on the side of the bulls when it comes to the fundamentals.
Those looking to buy the stock should be eyeballing the technical levels illustrated above and not be shy pulling the trigger when they come.
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Bull of the Day: Airbnb (ABNB)
Airbnb (ABNB - Free Report) is a Zacks Rank #1 (Strong Buy) that is a leading platform for unique stays and experiences.The company's marketplace model connects hosts and guests online or through mobile devices.
The stock is coming off 2023 highs after a very positive earnings report. Airbnb has rallied over 70% off its December lows, so investors can’t be blamed for taking profits into the up move.
Going forward there is a strong argument that dips should be bought and the recent quarter supports that idea. Additionally, analyst estimates are being raised across all time-frames.
About the Company
Airbnb was founded in 2007 in San Francisco, CA. The company offers private rooms, primary homes, or vacation homes by connecting the host and the guest.
The stock has a Zacks Style Score of “A” in Value and Growth, but “F” in Value. The valuation is an issue for some investors as its PE is over 40.
Airbnb currently employs 6,800 and has a market cap of $83 billion. It pays no dividend.
Q4 Earnings Beat
In mid-February, the company reported an earnings beat of 78%. This was the 7th straight EPS beat, a streak that started back in Q3 of 2021.
Looking at the quarter, the company reported EPS of $0.48 v the $0.27 expected. Revenues came in at $1.90, which was slightly better than expected. Gross Booking Value came in at $13.5B, which was up 26% y/y. Adjusted EBITDA was $506M v the $333M last year and margins were 27%.
Q1 guidance was raised to a range of $1.75-1.82B v the 1.68B expected. The company said that FY23 EBITDA margin is “to be maintained”. Airbnb pointed out that Q1 of last year was impacted by the Omicron spread, so year over year comps were easily beat.
Management added that for the rest of 2023 “we expect to maintain the strong Adjusted EBITDA margin we delivered in 2022, as we offset the headwinds from lower ADR with incremental variable cost efficiencies and fixed cost discipline”.
The quarter was not only a pleasant surprise for investors, but analysts also got bullish. Since the report, analysts have aggressively hiked estimates and price targets.
Analyst Estimates
Looking at analyst estimates since earnings, we see numbers going higher across all time frames.
Over the last 7 days, estimates for the current quarter have gone from $0.00 to $0.14. For next quarter, we see a 16% jump over that same time frame.
Looking at the bigger picture and the current year, we see estimates heading 20% higher over the last month. Analyst have hiked from $2.80 to $2.86 before earnings, but then took that number up to $3.38 after earnings.
For next year, we have seen estimates over the last month go from $3.56 to $4.04. This is a move higher of 13%.
In addition to hiking estimates, analysts were quick to lift their price targets for ABNB. JPMorgan went from $105 to $135. UBS went from $114 to $130. Credit Suisse is one of the most bullish on the street, with a $160 target on the stock.
The Technicals
The stock jumped from $120 to $144 after the earnings announcement. This 20% move higher was on top of the stock's gain of 20% already on the year before the earnings report. From lows of 2022 to the recent highs, we are talking about a 75% move in just a couple months.
So it was no wonder that the stock was sold as profit takers stepped in. But investors that missed this move are wondering where they can buy a dip, instead of chasing. Let’s go over some levels that potential bulls should be watching.
The gap fill would be $121, which could be followed up with a test of the 21-day MA. This level is currently at $116 and in between those levels would be a great place for a starter position.
The 200-day moving average has been known to be tested in the current market environment, especially after a big earnings move like we just saw. Bulls should be ready to buy this level, which is currently just under $108.
For those waiting for Fibonacci levels, your halfway back is $112.50 and the 61.8% retracement is $105.
Bottom Line
Airbnb has had a massive move, which is causing some investors to take profits. However, the momentum is on the side of the bulls when it comes to the fundamentals.
Those looking to buy the stock should be eyeballing the technical levels illustrated above and not be shy pulling the trigger when they come.