Airbnb trajectory questioned by analysts after uncertain demand forecast
Thomas Barwick

A somewhat murky forecast for demand moving forward for Airbnb (NASDAQ:ABNB) motivated some caution among Wall Street analysts covering the stock on Wednesday.
While much of the Street applauded the Q3 results amid macroeconomic headwinds and noted continued strong demand for travel, a signal of âchoppyâ results moving forward was enough to give many pause. 
For example, Bank of America advised clients that while âAirbnb (ABNB) has one of the most attractive marketplace models in the sectorâ given its growth rate and brand recognition, its potential for post-pandemic demand declines hang over the name. As a recessionary scenario rears its head, a Neutral rating was deemed most appropriate.
Oppenheimer homed in on the very same issues, projecting volume issues to accelerate into 2023. Given a valuation premium to peers in its sector, âshares appear fully valuedâ at current levels, with room for multiple compression in the next year, according to the firm. As such, a likewise Hold-equivalent rating was reiterated.
Evercore ISI, while remaining bullish on the stock, voiced similar concerns with questions arising on what has changed in recent weeks.
âABNB cautioned that ADRs will face pressure from FX and business mix (geo, urban, listing type), beginning in Q4, which caused us to change our â23 ADR outlook from down 2% to down 7%,â equity analyst Mark Mahaney noted. âThis caution seems like a change from what we heard from ABNB and BKNG at our Sept. Tech Conference.â
As such, he removed the stock from its âTactical, Action & Positioningâ Outperform List. Nonetheless, he retained a Buy-equivalent rating on the name.
That said, not all analysts were cautious. In fact, Needham raised estimates while offering perhaps the most bullish reaction to the results.
âAlthough we are taking a conservative view on the flow through leaving our adj. EBITDA estimates unchanged in '23E with better margins offsetting lower bookings,â equity analyst Bernie McTernan advised clients. â3Q results will keep bears waiting for signs of the downward slide following peak travel, as demand growth remains strong across new and older use cases producing better than expected ADRs.â
He added that supply dynamics also look promising, counteracting some bearish takes on the results.
âWe like ABNB's positioning, as the company is ready to benefit from the reopening of the economy and pent-up demand for travel, in our opinion,â he concluded. âWithin the travel category ABNB has been taking share, aided by the pandemic, which is driving more people to try the service, we believe. Given the high quality marketplace ABNB enjoys the benefit of a network effect, with guests becoming repeat bookers and hosts themselves.â
Breaking with his more cautious peers, he reiterated a âBuyâ rating and assigned a $150 price target to the stock, above the Street average.
Shares of the San Francisco-based accommodation platform fell 5.89% at the market open on Wednesday.
Read the earnings call transcript.