Airbnb (NASDAQ:ABNB) is scheduled to announce its fourth-quarter earnings after the market closes on February 13, Tuesday. The company is likely to have benefited from the surge in travel demand. Furthermore, ABNB has surpassed expectations in ten consecutive quarters, which increases the likelihood of another beat, pushing the stock price higher. Interestingly, ABNB stock has jumped nearly 24% in the past three months, outperforming the broader S&P 500 Index (SPX) rally of about 14%.
The company connects hosts and guests online and allows them to book travel services and accommodation facilities worldwide.
ABNB – Q4 Expectations
Wall Street expects Airbnb to report sales of $2.16 billion in Q4, up about 14% year-over-year. Further, it is near the higher end of the management’s guidance range of $2.13 billion to $2.17 billion. In November 2023, Airbnb cautioned that macroeconomic factors and geopolitical conflicts may impact travel demand and its performance in Q4.
Turning to earnings expectations, Wall Street analysts expect Airbnb to post earnings of $0.65 a share in Q4, up nearly 35% year-over-year, due to the improvement in cost structure.
Encouraging Website Traffic Trend
According to TipRanks’ Website Traffic tool, visits to airbnb.com grew by 26.8% year-over-year in Q4. The company’s website traffic jumped to 292.52 million from 230.63 million in the year-ago quarter.
The increase in visits indicates that demand for the company’s offerings remained strong during the fourth quarter.
Analysts Weigh In
Last week, Deutsche Bank analyst Leo Horowitz raised the price target on Airbnb to $141 (4.5% downside) from $105, while maintaining a Hold rating. The analyst expects ABNB to beat expectations in the to-be-reported quarter, backed by growth in the Nights and Experiences Booked segment (representing net nights booked for stays and net seats booked for experiences).
Another Top-rated analyst, Lloyd Walmsley from UBS, maintained a Neutral stance on ABNB. The analyst raised his price target to $148 (0.27% upside) from $125 and reiterated a Hold rating.
Is Airbnb a Buy, Sell, or Hold?
Wall Street is sidelined on Airbnb stock with a Hold consensus rating. This is based on four Buys, 15 Holds, and three Sells. The average ABNB stock price target of $139.21 suggests a 5.7% downside potential.
Insights from Options Trading Activity
While analysts are sidelined about ABNB stock, options traders are pricing in a +/- 8.77% move on earnings, smaller than the previous quarter’s earnings-related move of -3.32%.
Learn more about TipRanks’ Options tool here.
Bottom Line
Airbnb is witnessing growth, fueled by the resurgence in travel and the implementation of new features designed to attract both users and hosts. Interestingly, the website traffic tool paints an encouraging picture of the upcoming results. However, the recent rally in the stock has made it slightly expensive on the valuation front. This is reflected in analysts’ consensus ratings and average price targets.
