Airbnb is rallying but analysts are anxious on the rich valuation
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Airbnb (NASDAQ:ABNB) opened with a strong gain on Wednesday as investors sized up the company's earnings report favorably.
On Wall Street, Airbnb (ABNB) generated plenty of praise, although the rich valuation on the stock remained a key concern.
Mizuho Americas analyst James Lee said with a mix shift to urban and international markets, ABNB is likely to gain market share given its supply strength. Room night growth and EBITDA guidance were noted to be tracking ahead of consensus. The firm has increased confidence in strong fundamentals ahead for ABNB and has increased confidence in FY26 EBITDA of $5.5B being generated, but a Neutral rating is held in place due to premium valuation over online travel agency peers. The price target was clipped to $175 from $205.
Oppenheimer kept a Market Perform rating in place. Analyst Jed Kelly noted that despite flawless execution, ABNB is trading at 9.5X the 2023 revenue estimate with tougher back-half comparable on the way.
Bank of America was also cautious on Airbnb (ABNB) despite what it expects will be a strong summer travel season. Analyst Justin Post thinks ABNB is one of the strongest brands on the Internet, but thinks the sector multiple compression could create a ceiling. A Neutral rating and price objective of $188 was maintained.
There was some bullishness on Wall Street with Citi reiterating a Buy rating on Airbnb (ABNB) on its view the company did enough to justify a higher valuation.
"Following 1Q22 results whereby Bookings, Revenue, and EBITDA came in 4%, 3%, and 205% above consensus, respectively, we emerge incrementally confident that Airbnb is taking share of the global lodging travel market and shares remain our top pick within the online travel vertical."
Shares of ABNB rose 6.93% in early action vs. the 52-week range of $129.71 to $212.58.