Airbnb Stock Plummets As JPMorgan Analyst Praises 'Solid Q1, Stable Q2, Acceleration In Q3'

Zinger Key Points
  • Airbnb Reddit reported Q1 revenues and EBITDA of $243mn and $10mn, surpassing expectations of $212mn and $24mn, one analyst said.
  • The Summer backlog is tracking ahead of 2023 levels, suggesting a sequential revenue acceleration in Q3, another analyst added.

Shares of Airbnb Inc ABNB declined by 7.69% to $147.75 in the premarket session on Thursday and continued to tank after the house-rental company reported first-quarter results.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

  • JPMorgan analyst Doug Anmuth reiterated a Neutral rating, while raising the price target from $140 to $145.
  • Goldman Sachs analyst Eric Sheridan maintained a Sell rating, while lifting the price target from $123 to $130.
  • BMO Capital Markets analyst Brian Pitz reaffirmed a Market perform rating, while raising the price target from $135 to $151.
  • Piper Sandler analyst Thomas Champion maintained a Neutral rating, while lifting the price target from $145 to $155.
  • Wedbush analyst Scott Devitt reiterated a Neutral rating and price target of $160.
  • JMP Securities analyst Nicholas Jones reaffirmed a Market Perform rating on the stock.
  • KeyBanc analyst Justin Patterson maintained a Sector Weight rating on the stock.

Check out other analyst stock ratings.

JPMorgan: "Solid 1Q, Stable 2Q, Acceleration in 3Q," Anmuth wrote in a note. Airbnb reported strong first-quarter results, with revenues of $2.14 billion, which exceeded expectations by 4%, and adjusted EBITDA of $424 million and margin of 19.8%, he said.

"The 2Q guide was a touch light vs. our/consensus expectations & did not have the acceleration in N&E hoped for by investors," the analyst stated. While top-line trends remained stable in the second quarter, management expects revenue growth to accelerate in the third quarter, driven partly by a "strong summer backlog," he added.

Goldman Sachs: Airbnb reported an "overall solid" report for the first quarter. Gross bookings and revenues were "slightly better" than expectations. And adjusted EBITDA was "well ahead," Sheridan said in a note.

He added, however, that management's second-quarter revenue guidance range was "slightly below Street estimates at the mid-point," with disappointing room night growth. Management also "reiterated 2024 as a year focused on investment with margin commentary," the analyst stated.

BMO Capital Markets: "Airbnb continues executing against its strategic initiatives, evident by supply growth of 17% and Gross Nights Booked up +10%," Pitz wrote. Double-digit active listing growth across all regions signals that "share gains are underway," he added.

The Summer backlog is tracking higher than the 2023 levels. This indicates "potentially accelerating revenue growth" in the third quarter, the analyst stated. He added, however, that the rise global marketing and continued tech investments "will likely compress margins in 2024."

Piper Sandler: Airbnb reported gross bookings of $22.9 billion for the first quarter, up 12% year-on-year, Champion said. "Nights & Experiences of ~133MM was just above our forecast of ~131MM while ADR of $173 was also slightly higher," he added.

The company recorded 18% year-on-year revenue growth to $2.1 billion and EBITDA of $424 million. That’s well above Street expectations of $360 million, the analyst stated. "Growth should re-accelerate in 3Q24 due to timing around the Olympics, but EBITDA margins could decline y/y in 2Q24," he further wrote.

Wedbush: "Expectations had been building heading into results given recent strength in the alternative category in the U.S. and Europe, which accelerated sharply beginning in February and has outperformed hotels in recent months," Devitt wrote in a note.

Management expects room night growth to be relatively stable in the second quarter, the analyst stated. "We think the room night guidance may ultimately prove conservative and note that bookings in 2Q are likely back-half weighted and build through the quarter into the beginning of the peak summer travel season," he added.

JMP Securities: Airbnb's adjusted EBITDA guidance for the second quarter "came in lighter than expected. Jones says this drove shares down ~8% in after-hours trading," Jones said. Management maintained the full-year EBITDA margin guidance with a floor of 35%, he added.

Airbnb “drove a 60% y/y increase in U.S. app downloads," Jones said.

KeyBanc Capital Markets: Airbnb's first-quarter results will "remain polarizing," Patterson wrote in a note. Bulls will focus on margin upside and take rate potential. Bears could focus on "another Room Nights & Experiences (RNE) miss and normalized revenue growth."

"Our view remains unchanged,” the analyst said. “Airbnb is undergoing a model transformation and travel is a slow rate of change business, so 2023’s 37% margin profile is likely a peak until 2025E at the earliest.”

Price Action: Airbnb, on last check, was down 6.67% and trading at $147.37 per share.

Now Read: Airbnb Faces Growth Hurdles Despite Strong Consumer Preference, Analysts Warn

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Posted In: Analyst ColorEarnings MissesPrice TargetReiterationTop StoriesAnalyst RatingsMoversTrading IdeasBMO Capital MarketsBrian PitzDoug AnmuthEric SheridanExpert IdeasGoldman SachsJMP SecuritiesJPMorganJustin PattersonKeyBanc Capital MarketsNicholas JonesPiper SandlerScott Devitt.Stories That MatterThomas ChampionWedbush
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