Uber vs. Airbnb: Which sharing economy giant is the best bet in the face of recession risks?

  • Uber and Airbnb face similar macro headwinds
  • But the pandemic shock has shown that their business models are resilient and can withstand a sharp drop in demand.
  • Uber stock has rebounded strongly in the past three months, rising about 50% from its June low

Unless the economy improves sharply, the two tech disruptors of the modern era, Uber Technologies (NYSE:) and Airbnb (NASDAQ:), are on course for their first recession since becoming public companies.

San Francisco housemates belong to a market segment that emerged after the global financial crisis of 2008. As such, they have yet to experience challenges like the ones we are currently facing.

However, although investors are generally reluctant to hold technology companies in their portfolios when navigation is difficult, the two global operators have emerged much stronger after the economic shock caused by the pandemic.

Here’s a closer look at their recent trading performance to analyze whether their stocks could prove to be bargains for long-term investors.

Uber benefits from diversification

CEO Dara Khosrowshahi’s key post-pandemic strategy has been to capitalize on the delivery boom by expanding into other categories like convenience store items, alcohol and groceries, transforming the Uber rides app much more than just carpooling.

The latest San Francisco-based Uber shows that strategy is paying off. Revenue and gross bookings hit a record high in the quarter ended June 30.

Uber Eats revenue is up 25% from a year ago and is expected to continue to do so, as Khosrowshahi told analysts that one of the main goals for the rest of this year would be to increase the profitability in the delivery segment.

Uber stock has rebounded strongly over the past three months, rising about 55% from its June low. According to most analysts, this momentum will likely continue as the company moves closer to profitability.

Uber Weekly Chart

In one invest.com poll of 46 analysts, 41 are pricing buying UBER stock, with a consensus price target implying a 48% upside.

Uber Consensus Estimates

Source: Investing.com

In a recent note, Wolfe reiterated Uber as the top pick, saying he sees a “significant avenue of profitability” for the company. Bernstein also reiterated that Uber was outperforming, arguing that in a tough economic environment, investors should stick with market leaders, such as Uber, who can emerge from this period as better companies.

Airbnb benefits from global travel rebound

The rental platform, also based in San Francisco, has developed a business model that is flexible enough to deal with different economic challenges. Recent proof of this adaptability came during the pandemic when travel demand suddenly plunged, casting doubts on the future of a company that went public during one of the biggest health crises in modern history.

But in these two years of upheaval, Airbnb has not only weathered the pandemic but also thrived, achieving the best year in company history in 2021.

The company quickly restructured its app to take advantage of a new world of travel thanks to the flexibility offered by new remote working policies that allowed people to disperse to thousands of cities and stay for weeks, months, even entire seasons at a time.

Extended stays were the fastest growing category in the second quarter, gaining nearly 90% from three years ago, suggesting that some of the pandemic-related push is here to stay. stay, especially when large numbers of workers have the option of working from anywhere. .

According to its latest report, ABNB posted a 58% increase in year-over-year sales in the second quarter to $2.1 billion, helping to generate the most profitable second quarter in the world. business to date. Still, that growth was slower than last quarter, when revenue jumped 70% from the first quarter of 2021.

ABNB Weekly Chart

ABNB Weekly Chart

As soaring prices and rising interest rates begin to reduce consumer purchasing power, travel demand could take a hit in the coming days as the post-pandemic desire to fly wanes.

It’s the main reason most Wall Street analysts aren’t convinced now is a good time to bet on Airbnb shares as the company forecasts a record third quarter for bookings and gross sales. . In one invest.com survey of 39 analysts, only 16 rate the stock a buy.

ABNB Consensus Estimates

Source: Investing.com


While I like both stocks for any long-term buy portfolio, Uber’s diversified business model makes it much more resilient to economic shocks. While still strong, Airbnb is more prone to economic headwinds if travelers hold back on discretionary spending. If you have to choose between the two, I recommend sticking with Uber.

Disclosure: The writer is long on both Uber and Airbnb.

Comments are closed.