Airbnb earnings preview: Reporting amid a busy season, and after a tough warning
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Airbnb (NASDAQ:ABNB) reports results on Thursday for the quarter that preceded a busy summer travel season.
EPS is expected to come in at $0.77 with revenue of $2.42B.
The earnings are coming after the company in May provided weaker-than-anticipated guidance that rattled investors and sent shares tumbling.
The online travel giant warned that comparisons for the second quarter were tough due to unfavorable year-over-year comparisons that lapped the post-pandemic boom in travel demand.
RBC Capital Markets: Sector Perform
Pricing is firm, RBC said, with consumers confident well into the travel season. Investors were disappointed last quarter when ABNB said it would release products that would drive more proactive price cuts where necessary.
Still, given a relative lack of softening price, RBC expects margin estimates to be moving up coming out of this quarter.
âQuestions will still linger about next year and what happens if or when pricing declines do start to show up more but we think this will likely continue being an intellectual exercise as opposed to investors really seeing anything,â the firm said.
Mizuho: Neutral
Consumer sensitivity to U.S. average daily rates (ADR) was an issue. Mizuho said its tracking of hotel ADRs show moderation in the U.S., with strength overseas from the return of international travel.
âWe believe the moderation in the U.S. is an additional headwind for price-sensitive US consumers, as the price gap between hotels and alternative-accommodations narrows, which could put further pressure on Airbnbâs ADRs,â Mizuho said.
âHowever, we believe that EMEA could pick up the slack, with the relative discount to US ADR expanding to nearly 50% from 35% pre-pandemic.â
Management can handle ADR uncertainties, Mizuho said, and the company should gain efficiency from renegotiating payments and cloud computing contracts.
Mizuho raised its price target on ABNB to $145 from $125 and maintained its Neutral rating.
KeyBanc Capital Markets: Overweight
KeyBanc raised its ABNB estimates for EBITDA in 2023 and 2024 by 2% and 4%, respectively, to reflect a strong travel environment.
âWe believe a strong consumer and FX dynamics should help mitigate some ADR pressure from regional (more international) and property (fewer homes) mix shift,â KeyBanc said.
Guidance from the company assumed difficult comps from lapping the COVID Omicron variant, but KeyBanc sees that as having been conservative.
âPrior guidance was for 2023 EBITDA margin to be broadly in line with 2022. We suspect this could be raised due to more favorable trends YTD, unless Airbnb sees an investment opportunity to pursue.â
Seeking Alpha analyst Logan Kane
Airbnb (ABNB) is up nearly 50% off its May lows, a huge rise, and a steep valuation to match at 44.5x 2023 earnings estimates, Kane noted.
âThe company lies firmly in the crosshairs of politicians and activists for its perceived role in fueling increases in homelessness and social problems in cities. Short sellers too are keyed in, taking notice of the company's high valuation, lack of competitive moat, and high expense structure.â
Airbnb is a good product, but âthere are limits to how much they can monetize this,â Kane said.
âTo sum it up for Airbnb, we have a solid product with some structural long-term profitability issues. Airbnb should always be able to stay in business and make some money, but competition from competitors and the hosts themselves mean that earning large and growing profits year after year will be a challenge.â
Airbnb (ABNB) is up 70% in 2023 and down 4.6% in the past five days.
More on Airbnb:

Airbnb: The Runway Is Still Long
Airbnb is not in a party mood this summer
Airbnb dips after Wells Fargo warns results could lag expectations