Shares of travel company Airbnb $ABNB-0.2% are losing nearly 10% today, despite the company reporting better-than-expected Q1 results. It also presented a relatively cautious outlook for the second quarter of the year. The second quarter has historically been the most successful quarter for its business, along with the third quarter, thanks to a summer season favorable for travel demand. Investors are concerned that potential consumer weakness will limit growth potential later in the year. At the same time, Q1 2023 was the first profitable quarter in the company's history.
Revenues: $1.82 billion vs. $1.79 billion forecast (20% y/y growth)
Earnings per share (EPS): $0.18 vs. $0.09 forecast ($0.03 loss in Q1 2022)
Net profit: $117 million vs. $19 million loss in Q1 2022
Airbnb highlighted that the start of the year has been strong for the company and expects an equally strong travel season in the summer. However, it cautioned that year-over-year comparisons may be difficult due to exceptionally strong comparable demand from Q2 2022 (recovering from the Omicron spike).
The company estimates Q2 revenue in the range of $2.35 billion to $2.45 billion. Analysts polled by Refinitiv were expecting $2.42 billion. Looking at the market's reaction to these predictions - it seems overly exaggerated. On the other hand, Aribnb shares have appreciated by a whopping 50% since the beginning of the year, so the release of the report may represent "selling the facts";
The company posted a new record for bookings in the first three months of the year ($121m, up 19% year-on-year), showing the strength of demand despite recession fears. Average daily bookings were unchanged in the first quarter from the prior year at $168, although the number of active listings increased 18% year-over-year;
The company said in a statement that it saw customers booking travel well in advance in the first quarter, which could be a harbinger of a stronger second quarter. Customers in the Asia-Pacific region have been particularly strong, with room nights booked up more than 40% year-over-year in Q1;
Airbnb said it has deferred higher marketing spending for the first half of the year to support the peak summer travel season. The company plans to increase its presence in less mature markets;
Airbnb plans to integrate artificial intelligence features into its platform next year, including GPT-4
Nice summary, but I don't really understand the market reaction from these numbers. Do you use Airbnb when you travel?
I think $ABNB-0.2% will benefit a lot in the next few years if mortgage and real estate prices go down. It will stop the issue of there being almost no place to live in some touristy cities due to short term rentals etc.
So the question is whether the current price is a bargain.