Lodging platform Airbnb (ABNB) is reporting its Q3 earnings later this week. Should investors be packing their bags or checking in to the stock ahead of results?
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.
What Wall Street Expects
Wall Street is expecting Airbnb to report Q3 earnings of $2.29 per share, marking a 7.5% increase on the same period last year. The group is also tipped to report revenues of $4.08 billion, which would be a 9.5% year-over-year increase.
Will ABNB be able to beat these estimates? As can be seen below, its recent record of outperforming expectations is mixed.
Key Issues Ahead of Earnings
In its Q2 earnings, ABNB reported a 13% year-over-year revenue increase to $3.1 billion and a 34% adjusted EBITDA margin. The company also reported a net income of $642 million, translating to an EPS of $1.03, which grew by 16% and 20%, respectively.
It was helped by notable growth in expansion markets such as Japan and the launch of services and reimagined experiences. It also highlighted a growing interest from potential hosts, with over 60,000 applications submitted to host a service or experience.
However, it reported slower growth in North America and guided that year-over-year growth comparisons would become tougher towards the end of Q3 and into Q4. Investors will be keen to find out whether that mood has changed in the Q3 results.
UBS analyst Stephen Ju recently lowered the firm’s price target on Airbnb to $145 from $148 and kept a Neutral rating. UBS is concerned about how traffic mix across the internet will shift as ChatGPT continues to gain users. But, it sees Airbnb as being “most insulated” given its “most-fragmented” inventory.
Brian Chesky, the CEO of Airbnb said that the company is interested in using ChatGPT’s AI technology, but isn’t moving forward with it yet because the software isn’t ready.
KeyBanc transferred coverage of Airbnb to analyst Sergio Segura last month. He rates the stock at Sector Weight. The firm notes that given slower earnings growth and minimal margin expansion as the company invests to scale new products, Airbnb shares look “fairly valued.”
Is ABNB a Good Stock to Buy Now?
On TipRanks, ABNB has a Hold consensus based on 11 Buy, 15 Hold and 5 Sell ratings. Its highest price target is $180. ABNB stock’s consensus price target is $140.35, implying a 14.71% upside.
