Despite ‘not entirely positive results’, Evercore ISI still thinks Airbnb is one of the best core stories
According to Evercore ISI, there are still several reasons to own Airbnb shares despite its latest quarterly numbers. Analyst Mark Mahaney reiterated the stock as an outperformer with a price target of $150, implying a 37.7% upside. Airbnb fell 5% in premarket trading after the company reported ‘not entirely positive results’, although it said the travel platform’s performance was ‘more of a correction in expectations than a correction. fundamentals”. “We are fully aware that tough competition and easing consumer discretionary trends will be headwinds for ABNB shares in H123, but we remain focused on one of the best fundamental stories (both growth AND profitability) of ‘Netland’,” he said in a Tuesday Note to Clients. Airbnb on Tuesday reported earnings per share that beat expectations, while revenue was in line with estimates. The upper end of the company’s fourth-quarter revenue forecast, though it was lower than some analysts’ estimates, according to data from StreetAccount. Mahaney also said the book nights guide was not negative like in the previous quarter, while revenue and gross bookings also performed well. He also pointed to the disclosure of 15% supply growth which contradicted arguments that supply had peaked, which in turn would retard growth. But he expects a 7% drop in the average daily rate of space used by the company compared to available space. This marks a shift to red from the modest 2% gain expected for 2022. This is in line with trends seen in travel of growing demand in the wake of the pandemic, although some have warned of potential cuts to come as inflationary pressures push consumers to cut back on non-essential spending. Revenue growth, in turn, is expected to slow to 20% in 2023 from 39% in 2022. But it is expected to accelerate to 27% in 2024. Mahaney said he expects demand to weaken, with an increase in overnight stays of around 24%. in 2023 compared to 32% in 2022. On the other hand, he said that the company would be helped by a more permanent adoption of remote working and living. The Asia-Pacific region is still struggling but has improved from its worst performance, he said. As the company tries to position itself against a tough macro, Mahaney said it is playing smart by completing $1 billion in buybacks from its first share buyback authorization, which will total $2 billion. . He called it a “welcome step” in value creation. – CNBC’s Michael Bloom contributed to this report.
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