Reports Q2 2021 results Thursday, Aug. 12 after close
Expected Revenue: $1.26 B
EPS forecast: – $0.36
When Airbnb (NASDAQ:) releases its latest quarterly report later today, investors will be most interested in whether the reopening of the U.S. economy is boosting domestic travel and this alternative accommodation platform is helping to mitigate the pandemic. Reduce. lose era.
The platform's Q2 earnings report is also important, as bookings in the current summer season can provide some insight into the level of pent-up travel demand ahead of the winter holiday period.
Early indications suggest that Airbnb, based in San Francisco, is well positioned to exceed analyst expectations. Airbnb received a rare double upgrade to a purchase rating from Gordon Haskett last month. The company sees improving trends, particularly in Europe, as a boon to its vacation rental inventory.
San Francisco-based Airbnb should see sales rise 42% to $1.26 billion from , while losses per share shrink to $0.36 from $1.95, according to analyst consensus forecast.
The latest earnings reports from other travel-related companies also show that after a year of lockdowns and border closures caused by the COVID pandemic, the travel industry is starting to see the green shoots of recovery.
Expedia Group (NASDAQ:) said last week that revenue has more than tripled to $2.11 billion and gross bookings have increased to $20.8 billion. Both exceeded analyst estimates.
Booking Holdings (NASDAQ:), the largest online travel agency, also reported a better-than-expected increase in room night reservations and expressed optimism that the pace of travel will continue to improve as more people are vaccinated and restrictions are imposed. released. Despite these early signs of a rebound in travel activity, investors aren't showing much excitement for Airbnb stocks, which are down more than 30% from a February high. It closed on Wednesday at $148.18.
Airbnb Weekly Schedule.
One possible explanation for this underperformance is the continued spread of the highly contagious Delta strain, forcing many countries to reintroduce lockdowns and travel restrictions.
Expedia's Chief Executive Officer Peter Kern issued a warning last week about the travel industry's short-term prospects, saying the road to full travel recovery remains bumpy until more of the world is vaccinated .
In our view, these uncertainties should not discourage investors from taking a position in Airbnb, which looks cheap after this year's slump. The San Francisco-based company's relative resilience in a historically bad year for the travel industry is the result of a flexible business model that allowed ABNB to meet customers where they wanted to go. This meant that city dwellers fled to less crowded, suburban and rural locations and families and groups looking for a holiday close to home.
These steps, and the company's cost savings, make ABNB one of the best assets in the travel industry. KeyBanc analysts set a price target of $180 a share this month, as they upgraded Airbnb to overweight, nearly 22% above its current price.
As noted in Kern's note:
"Airbnb's direct traffic advantage and minimal reliance on paid marketing isolates the company from [third-party] ad inflation.
"In an inflationary advertising market, we believe Airbnb has a new catalyst for investors to focus on: the extent to which direct traffic creates an economic benefit per unit," the analysts said, adding that the travel market is steadily making a comeback. should boost Airbnb's booking volume."
Bottom Line
Airbnb stock has weakened significantly since hitting a record high of almost $217 in February, following its IPO in early December 2020. That decline has made this stock attractive in our view, especially when travel demand is expected to gradually ease increase. Today's earnings could provide further evidence to support that optimistic view.
