Airbnb is viewed cautiously at BofA due to valuation, tough U.S. comparables
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Bank of America checked in on Airbnb (ABNB) ahead of the online travel company's earnings report.
Analyst Justin Post and team noted that recent AirDNA data suggests Europe and rest of world bookings are growing much faster than in the U.S., which faces tougher comparables this summer due to the positive travel climate a year ago.
Airbnb (ABNB) is said to have one of the best marketplace models in the Internet sector and strong bookings trends with continued demand strength. However, BofA warned on valuation with the stock trading at 11X the 2023 price-to-sales at a significant premium vs. OTAs and with ADRs expected to be a modest headwind.
Looking further down the road, BofA forecasts 2033 bookings at $245B, take rates at 15%, margins of 42%, and 9.5% cost of capital. Adding all them up and discounting back leads to a BofA price objective on Airbnb (ABNB) of $198.
Positives seen for Airbnb (ABNB) are growing consumer acceptance of alternative accommodations, market share gains, and long-term pricing power (higher take rates), but a Neutral rating is kept in place due to the valuation check.
Airbnb (ABNB) is expected to report earnings sometime during the first week of May.