Investors Heavily Search Airbnb, Inc. (ABNB): Here is What You Need to Know

Airbnb, Inc. (ABNB - Free Report) has attracted significant attention from investors recently. With growing interest on platforms like Zacks, it's essential to understand the key factors that may impact the stock's performance in the near future.

In the last month, Airbnb's stock has seen a return of +1.3%, while the S&P 500 composite has grown by +3.8%. Moreover, the industry sector, which includes Airbnb, has experienced a notable increase of 10.6%. This leads to an important question: What might be the future direction of Airbnb's stock?

While news reports or speculations about potential business changes can cause immediate movements in stock prices, the long-term value often hinges on fundamental metrics that drive buy-and-hold decisions.

Revisions to Earnings Estimates

At the core of stock evaluation is the analysis of earnings projections. Higher earnings estimates typically lead to a higher fair value for a stock, encouraging investors to buy and potentially raising the stock price. Studies show a strong correlation between changes in earnings estimates and stock price movement.

For the current quarter, analysts anticipate Airbnb will report earnings of $0.62 per share, reflecting a decline of -18.4% compared to the same quarter last year. The Zacks Consensus Estimate has decreased by 18% over the past month.

Looking at the full fiscal year, the consensus earnings estimate stands at $4.02, which indicates a decline of 44.5% year-over-year, with a minor adjustment of -3.6% in the last 30 days.

Expectations for the next fiscal year are more optimistic, with estimates rising to $4.50 per share, suggesting an increase of +11.9% compared to the previous year's figures, despite a slight reduction of -6.5% in estimates over the past month.

Zacks Rank, which incorporates earnings estimate revisions, currently rates Airbnb as a #3 (Hold). This rank suggests the stock may perform similarly to the broader market in the near term.

Revenue Growth Forecast

While earnings growth is crucial, it cannot happen without a corresponding increase in revenue. For Airbnb, the current quarter's consensus revenue estimate is $2.43 billion, anticipating a year-over-year growth of +9.4%. For the current and next fiscal years, revenue projections of $11.05 billion and $12.26 billion indicate growth rates of +11.4% and +11%, respectively.

Last Reported Results and Surprise History

In its most recent quarter, Airbnb reported revenues of $3.73 billion, marking an increase of +9.9% compared to the previous year. The earnings per share (EPS) for the quarter was $2.13, down from $2.39 year-over-year.

This revenue exceeded the Zacks Consensus Estimate of $3.72 billion by +0.26%, while the EPS fell short by -1.84% of the expectations.

Over the last four quarters, Airbnb has met or exceeded consensus EPS estimates twice and exceeded revenue expectations three times.

Valuation

Considering a stock’s valuation is critical for investment decisions. Determining whether a stock's price reflects its intrinsic value and future growth potential is fundamental in predicting its price trajectory.

Comparing Airbnb's current valuation multiples like price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) with its historical values and market peers helps to assess if its stock is overvalued, undervalued, or fairly valued.

Airbnb receives a Zacks Value Style Score of D, indicating it is trading at a premium compared to its peers, which may suggest an overvaluation. Interested readers can check the specific metrics driving this valuation.

Bottom Line

The factors outlined here, along with additional data, can assist in evaluating the market's interest in Airbnb. However, with a Zacks Rank of #3, the stock is expected to perform in line with broader market trends in the short term.

Airbnb, Investment, Earnings