Airbnb Inc (NASDAQ: ABNB) had a rather difficult 2022 and, unfortunately, next year probably won’t be good either – according to a Morgan Stanley analyst.
Airbnb stock will continue to fall
Brian Nowak downgraded the vacation rental company this morning to “underweight” and said the shares could drop further to $80 – a further 15% drop from here.
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He is confident growth will slow from now on as Airbnb continues to mature as a business.
Airbnb’s required term supply has been a key debate since the IPO and our new in-depth analysis of supply and occupancy speaks to the headwinds of nascent growth.
From 2018 to 2022, the Nasdaq-listed company increased its listings by approximately 12%. But the Morgan Stanley analyst expects that growth to be 7.0% or less through 2025. For the year, Airbnb Stock is down 50% at writing.
Nowak also presented a bear case
Nowak also offered a “bearish case” that sees the stock plummet to $60 per share. More alarmingly, he says there is an above average risk of this happening since this valuation is based solely on a multiple comparable to peers like Booking Holdings. The note reads as follows:
Our supply slowdown model shows how increasingly important it is for Airbnb to drive demand growth through higher occupancy and/or more available nights per listing.
Analyst is dovish on Airbnb stock also because he disagrees with consensus that occupancy rate will reach 44% by 2025. It now calls for 8.0% EBITDA growth next year and 14% in 2024.
Last month, Airbnb reported a strong third quarter but lower guidance for the fourth quarter.
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