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Airbnb Earnings Are Coming; Here’s What Matters
Stock Analysis & Ideas

Airbnb Earnings Are Coming; Here’s What Matters

Q3 earnings season has kicked off and over the next few weeks the ritual quarterly event will be the focal point on Wall Street.

Ahead of Airbnb’s (ABNB) anticipated Q3 report (expected in November) Stifel’s Scott Devitt has been looking into the past 3 months’ performance to find out what’s on offer in the hospitality disrupter’s upcoming print.

A good start to the summer travel season, plus new features for hosts and guests and strong pent-up demand saw the company deliver a solid Q2 report as both revenue and gross bookings came in a way above expectations. Non-urban listings in Europe (with the easing travel restrictions proving beneficial) and North America, which boasts the highest average daily rates (ADRs) were particularly robust.

For Q3, Airbnb has suggested booking windows are “directionally consistent with comparable 2019 levels,” and the company is expecting the “highest quarterly revenue and profit on record” due to the benefits of a “large backlog” of check-ins.

That said, on the Q2 earnings call, management provided a “directional indication of 3Q trends,” noting that as of late July/early August, increased travel restrictions in certain areas due to the rise of the Delta variant were beginning to impact the business. The company was concerned this could “negatively impact” cancellation rates.

This is consistent with a dip in Airbnb website traffic. SEMrush data shows there has been a drop in Unique Visitors (UVs) between Q2 and Q3, from $105.6 million to $100.9 million, amounting to a 4.5% decline. On the other hand, compared to the same period a year ago, UVs are up by 5.5%.

As far as Devitt is concerned, the expectation of “less severe” sequential declines in ADRs compared to prior estimates results in a revision to his Q3 forecast.

The analyst now expects average daily rates of $149, a 7.5% quarter-over-quarter decline and an improvement on the prior call for a 13.1% sequential drop. This results in a Q3 bookings estimate of $12.1 billion, up from the prior $11.3 billion estimate.

For now, Devitt stays on the sidelines with a Hold rating although there’s also a price target raise – up from $145 to $160. Nevertheless, the new figure still suggests downside of 7% in the year ahead. (To watch Devitt’s track record, click here)

Turning now to the rest of the Street, where 6 other analysts join Devitt on the sidelines, but with the addition of 16 Buys and 1 Sell, the stock has a Moderate Buy consensus rating. The shares are anticipated to appreciate by ~7% over the next 12 months, given the average price target currently stands at $183.58. (See Airbnb stock analysis on TipRanks)

To find publicly traded companies with trending websites (i.e. top websites which have the highest website traffic increases over the past month), visit TipRanks’ Website Traffic Screener.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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