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On Thursday, Bernstein analysts maintained a positive outlook on Airbnb Inc . (NASDAQ:ABNB), currently trading at $120.23 with a market capitalization of $74.8 billion, reiterating an Outperform rating and a $185.00 price target. The research firm’s analyst, Richard Clarke, expressed confidence in Airbnb as the top choice in the online travel sector, despite acknowledging the company’s recent market share losses within the short-term rentals market. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculations.
Clarke attributed Airbnb’s underperformance to geographical differences and the current investment phase the company is undergoing. Supporting this investment thesis, Airbnb maintains impressive gross profit margins of 83% and has achieved nearly 12% revenue growth over the last twelve months. The analyst projected a 13% growth potential for Airbnb in the fourth quarter, while consensus estimates suggest 10% revenue growth for the upcoming fiscal year. The analyst’s note hinted at an expected acceleration in growth, which could lead to future market share gains for the company.Want deeper insights? InvestingPro subscribers have access to over 10 additional ProTips and comprehensive financial metrics for Airbnb, including detailed health scores and growth indicators.
Airbnb’s position as a pure play in the most attractive lodging segment was highlighted, with expectations for the segment to generate $5.4 billion in free cash flow (adjusted for Share Based Payments) by FY27. The company has already demonstrated strong cash generation, with $4.5 billion in levered free cash flow over the last twelve months. Clarke pointed out that the current stock valuation is less than 15 times that anticipated free cash flow, though InvestingPro data shows the company currently trades at an EV/EBITDA multiple of 25.8x. Additionally, he noted that Airbnb’s new ventures present significant untapped upside potential not yet reflected in the firm’s or consensus free cash flow estimates.
The analyst’s comments underscored Airbnb’s potential for growth and innovation, suggesting that the company’s strategic investments and expansion into new areas of business could contribute to its long-term financial success. Despite the challenges faced in the short-term rental market, Bernstein’s stance indicates a belief in Airbnb’s ability to adapt and thrive in the evolving online travel industry.
In other recent news, Airbnb has been the focus of several analyst updates following its strong fourth-quarter performance. Jefferies upgraded Airbnb’s stock rating from Hold to Buy, raising the price target to $185, reflecting confidence in the company’s potential to capture a larger share of the lodging market. DA Davidson also increased its price target for Airbnb to $170, maintaining a Neutral rating, highlighting the company’s robust fourth-quarter results and positive guidance for the first quarter of 2025. Susquehanna lifted Airbnb’s price target to $200 while maintaining a Positive rating, despite the company’s forward-looking guidance being slightly below market expectations. Benchmark analysts raised their price target to $178, maintaining a Buy rating, and noted Airbnb’s strategic shift towards operating as a marketplace and potential advertising business. These analyst updates come amidst broader concerns in the travel industry, as major airlines like Delta and American Airlines (NASDAQ:AAL) have revised their profit forecasts downward. Delta’s announcement of reduced profit guidance has impacted the travel sector, with airlines and hospitality stocks experiencing declines. Despite these challenges, Airbnb’s recent developments and strategic initiatives have garnered positive attention from analysts.
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