Investors Advised to Wait for Better Entry Point as Airbnb (ABNB) Reports Strong Q2

Mizuho's James Lee raised their price target on Airbnb (NASDAQ: ABNB) by 3.4% from $145 to $150 on August 4, 2023. The analyst maintained their Hold rating on the stock.

The assessment of Airbnb's second-quarter 2023 earnings report, released on August 3, 2023, led Lee to advise investors to "wait to buy the shares for a better entry point or new catalysts, such as advertising, that could drive take-rate and profitability upside."

Airbnb's Q2 2023 earnings beat expectations, with an EPS of $0.98, surpassing the Zacks Consensus Estimate by 27.27% and Q2 2022's $0.56 by 75%. The company also reported revenue of $2.48 billion, beating the Zacks Consensus Estimate by 2.81% and Q2 2022's $2.8 billion by 18.1%. The adjusted EBITDA margin for the quarter stood at 44%, down from Q1 2022's 34%. Additionally, Airbnb recorded 115.1 million Nights and Experiences Booked, representing an 11% year-over-year increase, and a Gross Booking Value (GBV) of $19.1 billion, up 13% year-over-year.

For Q3 2023, Airbnb's management provided guidance, expecting revenue between $3.3 billion and $3.4 billion, implying a 14% to 18% year-over-year growth. The company anticipates revenue growth to outpace Nights and Experiences Booked growth, and the adjusted EBITDA margin is projected to increase from Q3 2022's 51%.

During the earnings call, Chairman, CEO & Co-Founder Brian Chesky highlighted a number of positive business trends for Airbnb in Q2. He stated, "First, guest demand at Airbnb remained strong. Active bookers grew in every region, and we had more first-time bookers compared to a year ago. Second, guests are traveling farther. Cross-border nights booked increased 16% in Q2 compared to a year ago, and we're especially encouraged by the continued recovery of Asia Pacific, where inbound international travel increased 80% compared to this time last year. And finally, the third trend we're seeing is that guests are staying longer on Airbnb. Millions of people remain flexible about where they live and work, and we see this reflected in our bookings."

In addition to Mizuho's James Lee, other analysts also updated their ratings and price targets for Airbnb on August 4, 2023. Credit Suisse's Stephen Ju raised their price target by 10% from $150 and maintained a Hold rating on the stock. Baird's Colin Sebastian raised their price target by 16.7% from $120 and also maintained a Hold rating. Barclays's Mario Lu raised their price target by 3.7% from $136 and maintained a Hold rating.

Currently, 38.9% of top-rated analysts rate ABNB as a Strong Buy or Buy, while 50% consider it a Hold, and 11.1% either recommend or strongly recommend selling the stock.

The consensus forecast among analysts suggests that ABNB's upcoming year will deliver earnings per share (EPS) of $3.83. If the analysts are correct, ABNB's next yearly EPS will increase by 6.3% on a year-over-year basis.

Since Airbnb's latest quarterly report on August 3, 2023, the stock price has decreased by 0.5%. However, on a year-over-year basis, the stock has shown growth of 17.6%. During this period, Airbnb has outperformed the S&P 500, which has seen an increase of 7.9%.

Mizuho analyst James Lee is ranked in the top 2% of Wall Street analysts by WallStreetZen, with an average return of 17.1% and a 64.6% win rate. Lee specializes in the Consumer Cyclical and Industrials sectors, among others.

Airbnb, Inc., headquartered in San Francisco, California, operates a platform that connects hosts and guests worldwide, allowing for the booking of stays and experiences. The company primarily offers private rooms, primary homes, or vacation homes. Founded in 2007, Airbnb, Inc. was formerly known as AirBed & Breakfast, Inc. before changing its name in November 2010.

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