Airbnb (NASDAQ:ABNB) is facing some trouble in Italy. A judge has issued an order to seize $835.5 million from the company, citing allegations of tax evasion. Three individuals who held managerial roles at Airbnb between 2017 and 2021 are being investigated and are targets of the money seizure order, along with the company.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The penalty relates to a 2017 law that requires Airbnb and other short-term rental platforms to collect 21% of rental income as tax from Italian landlords. Regulatory authorities allege that ABNB failed to collect this tax on roughly €3.7 billion of its rental income.
It is worth highlighting that Airbnb contested the law last year, but the court ruled the final decision in favor of Italy’s tax regulations.
Is Airbnb a Buy, Sell, or Hold?
Airbnb has taken several initiatives to enhance its platform. These include the introduction of new features for a better user experience and expanded product offerings to increase its total addressable market (TAM). Nevertheless, a potential decline in demand growth could affect both revenue growth and profit margins in the upcoming quarters.
Overall, Wall Street analysts are cautiously optimistic about ABNB. Airbnb stock has a Moderate Buy consensus rating based on 13 Buys, 15 Holds, and three Sells. The average stock price target of $139.72 implies an 18.2% upside potential. The stock is up more than 39% so far in 2023.
