Wei Fang, an analyst from Mizuho Securities, has initiated a new Buy rating on Airbnb (ABNB).
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Wei Fang’s rating is based on Airbnb’s strategic shift towards expanding its presence in the hotel market, which is expected to drive significant revenue growth. Fang anticipates that each percentage point of market share Airbnb captures in the global hotel sector could substantially boost its adjusted EBITDA and EPS, translating into a notable increase in share value. Currently, the potential success of this strategy is not reflected in the stock price, presenting an attractive investment opportunity.
Fang also highlights Airbnb’s strong user base, exceptional product design, and direct traffic as key factors that enhance the likelihood of success in this new venture. Although there are risks, such as the potential for rapid deceleration in the core short-term rental market and possible challenges in integrating hotel offerings, the overall growth prospects and current valuation make Airbnb a compelling buy. The anticipated increase in hotel supply and the introduction of new products like a loyalty program further bolster the positive outlook.
In another report released on September 22, Bernstein also maintained a Buy rating on the stock with a $165.00 price target.