Analysts like Airbnb’s latest earnings but still see risks for the short-term rental stock
Airbnb’s most recent quarterly results beat expectations, but most analysts are still concerned about the stock’s future. Several analysts covering the stock reiterated their neutral or sell ratings on Airbnb a day after the company released its fourth-quarter calendar results, citing ongoing risks to the short-term rental stock. “Risks include competition, slower-than-expected consumer acceptance of alternative lodging, a potential re-acceleration in core short-term stays, and a faster-than-expected rollout of ancillary revenue streams,” Credit Suisse analyst Stephen Ju said in a note, maintaining his neutral rating. The analyst has a price target of $160 per share, which represents a 32.3% upside potential. JPMorgan’s Doug Anmuth also reiterated a neutral rating on the stock, noting that online travel is becoming increasingly competitive. He added that Airbnb is still “early in the market”. [its] Profitability increase,” meaning it might be a while before the bottom line shows significant growth. Anmuth also pointed to a more fundamental issue for Airbnb, which is affecting Airbnb’s reputation and public perception.” Struggling with damage to rental properties from parties, the company implemented a permanent ban on house parties in 2022. In addition, Airbnb has faced regulatory pressures in the US and other regions, with governments raising concerns about the companies’ impact on local house prices. ABNB 1D Mountain Airbnb after publication of fourth-quarter results Goldman Sachs’ Eric Sheridan offered even more negative comments on the stock going forward. He reiterated his sell recommendation for Airbnb. “Looking ahead to 2023, we continue to have concerns about a mix of shifting consumer behavior,” Sheridan wrote Wednesday. He added that these worries “could result in either an overall slowdown n in travel trends (booking growth), mix-shift Dynamics that could slow the rate of change in ADRs, both elements have downward pressure on incremental margins and the long-term long-term growth debate that has persisted around a post-pandemic environment looks like this (return to the office vs. hybrid work environments).” Sheridan added his price target for the stock from $87 to $98 per share. However, this new target still implies a drop of nearly 19% from Tuesday’s close. However, not everyone was so negative towards Airbnb after the earnings report. Wells Fargo’s Brian Fitz said he was “moving on[s] liking ABNB’s category leadership, consistently strong execution and operational discipline.” While noting that concerns about margin pressures and macroeconomic headwinds could weigh on strong demand, he remained optimistic that Airbnb can remain resilient. Airbnb’s business model “has been impacted by the COVID-19 pandemic,” he wrote in a note to clients Wednesday, adding that he expects “ABNB to be able to leverage its various tailwinds and moats to deliver strong revenue and earnings growth at LT.” Airbnb laid off 25% of its employees during the 2020 pandemic as part of cost-cutting efforts. The company has since resumed expanding its workforce and expects “to continue hiring at a reasonable pace in 2023.” Current headcount is down 5% compared to 2019, while revenue is up 75%. Fitz reiterated its overweight position in the stock and raised its price target to $165 from $130, up 36.5% from Tuesday’s close of $120.87 — CNBC’s Michael Bloom contributed to the report .
