Airbnb

Should I Buy Airbnb Stock Ahead Of Its First-Quarter Earnings?

Analysts estimate that Airbnb stock could rise after it releases earnings as the company is in recovery mode, but should you buy shares?

Experts believe that Airbnb (NASDAQ: ABNB) is currently in recovery mode, in the sense that people are beginning to travel more. The rental marketplace should increase its profitability once this activity picks up to normal levels. Investors are waiting to see if the company’s earnings reflect this on Thursday and many expect the stock to gain by the end of the call. 

Read how we expect Airbnb to do in its earnings report on Thursday. 

Is Airbnb stock overvalued? 

In early April, Airbnb stock traded at $190 per share, which many investors believe to be overpriced. Since then, shares have fallen around 20% and are currently down 30% from its peak, trading at $140 per share. With over a third of U.S. citizens now vaccinated, Wall Street is becoming even more bullish on the leading travel rental site. In addition, Airbnb’s growth outlook also remains high, with revenue projected to increase by more than 40% in 2021 and a further 35% in 2022.  

Should I buy Airbnb shares? 

Another bonus of investing in Airbnb, and not a hotel company or airline, is that the company will likely get back to normal faster than other travel-related businesses. This is due to the company not relying so heavily on business travel, which is unlikely to return to pre-pandemic levels with the remote working trend taking off, as Airbnb users are known for choosing longer stays in quiet locations. 

Airbnb’s gross bookings declined 31% in the December-ended quarter primarily due to lockdowns, but if the company reports a solid revenue beat and a stronger outlook for the first quarter of 2021, it’s possible that shares will skyrocket from current levels. For the full year, analysts expect Airbnb sales to grow 40%, and in comparison, the company’s revenue was down 30% in 2020. 

When is Airbnb reporting Q1 earnings? 

Airbnb reports earnings for Q1 on Thursday, 13th of April, at 5:00 pm Eastern Time. 

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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here