Company / Analytics

Analytics, 16 February 2022

Airbnb earnings and market outlook

Airbnb stock rose Wednesday after the firm reported fourth-quarter earnings that beat analyst estimates and offered a positive outlook on the travel industry. Airbnb has spent much of its time focusing on a sort of “travel revolution” as remote work becomes a more permanent option for many across the U.S.

In a letter to shareholders, the company said that “nearly two years into the pandemic, it’s now clear that we are undergoing the biggest change to travel since the advent of commercial flying”. As a result of remote work, the company said, people are spreading out to thousands of towns and cities, staying for weeks, months or even entire seasons at a time.

The home rental company said current-quarter bookings are likely to exceed pre-pandemic levels for the first time significantly. Airbnb shares rallied 3.5% in the premarket.

Airbnb earnings

The company reported adjusted earnings of 8 cents share on revenue of $1.53 billion. Analysts expected Airbnb to report adjusted earnings of 4 cents on revenue of $1.45 billion.

Revenue climbed 38% from the year-ago period. Airbnb expects first-quarter 2022 nights and experiences booked to significantly exceed Q1 2019 levels. It estimates revenue to fall between $1.41 billion and $1.48 billion in the first quarter of 2022, topping analyst estimates of $1.24 billion.

In a letter to shareholders, the company said that “nearly two years into the pandemic, it’s now clear that we are undergoing the biggest change to travel since the advent of commercial flying”. As a result of remote work, the company said, people are spreading out to thousands of towns and cities, staying for weeks, months or even entire seasons at a time.

The company said that “nearly half of our nights booked in Q4 were for stays of a week or longer. One in five nights booked were for stays of a month or longer”, indicating that people are continuing to take advantage of remote work opportunities which allows for more dispersed working and travel at the same time.

How did the stock move?

Airbnb stock rose 2.7% to 185.10 during morning trading on the stock market today.

The current consensus among 31 polled investment analysts is to hold stock in Airbnb Inc. This rating has held steady for most of February when it was unchanged from a hold rating. The 26 analysts offering 12-month price forecasts for Airbnb Inc have a median target of 205.00, with a high estimate of 250.00 and a low estimate of 150.00. The median estimate represents a +8.26% increase from the last price of 189.37.

Outlook

The sector has been one of the earliest and most harshly affected sectors in the coronavirus pandemic. Staffing shortages at airlines and the extremely high infection rate of omicron discouraged some travel. Yet, overall, quarantine requirements are loosening in many countries.

Airbnb has spent much of its time focusing on a sort of “travel revolution,” as remote work becomes a more permanent option for many across the U.S. As a result, Airbnb said average trip length during the past two years increased by about 15%, with stays of more than seven days now representing nearly half of all gross nights booked. Meantime, long-term stays of 28 nights or more continued to be its fastest-growing category by trip length. Those extended stays accounted for 22% of gross nights booked in the fourth quarter, up 16% from Q4 2019.

Airbnb noted that despite the continued near-term uncertainties, there is evidence of pent-up solid demand: as of the end of January 2022, the firm had over 25% more nights booked for the summer travel season than at this time in 2019.

The company said it had its most significant number of listings yet, but did not provide a figure.

Its competitors Expedia whose brands include Hotels.com, Vrbo, Orbitz and Travelocity, also reported fourth-quarter results on Friday that soundly beat Wall Street estimates. Meanwhile, another online travel company, Booking Holdings, will report fourth-quarter results after the market close on Feb. 23.

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