Airbnb's Q2 Performance Was Good But Analysts Remain Wary Of Q3 Due To Uncertain Macros

Airbnb, Inc ABNB registered revenue growth of 58% year-over-year to $2.1 billion in Q2, in line with the consensus of $2.1 billion. GAAP EPS of $0.56 beats by $0.13.

Airbnb declared a $2 billion share repurchase program. It expects 3Q revenue of $2.78 billion-$2.88 billion vs. a consensus of $2.77 billion.

BofA analyst Justin Post reiterated a Neutral and $125 price target on Airbnb. Post acknowledged the healthy growth while addressing early bookings season contributing to the 3Q bookings slowdown.

Mizuho analyst James Lee maintained Airbnb with a Neutral due to its premium valuation versus peers and cut the price target from $175 to $135.

ABNB demonstrated strong operating leverage by beating EBITDA meaningfully, he noted. At the same time, room night growth guidance missed consensus, possibly due to macro uncertainties and weaker-than-expected inbound travel from Europe (due to FX). Lee expected FY23 room night growth to be below consensus.

Morgan Stanley analyst Brian Nowak had an Equal-Weight rating with a price target of $100. He saw 3Q guide lower than expected, and margin expansion seems more difficult ahead at the backdrop of slowing growth. 

DA Davidson analyst Tom White maintained Airbnb with a Buy and cut the price target from $210 to $140. ABNB's topline trends remain solid, especially after factoring in recent incremental FX headwinds. 

However, White did not see the headwinds fully factored into consensus GB/revenue forecasts. 

Needham analyst Bernie McTernan maintained Airbnb with a Buy and cut the price target from $220 to $150. He saw mixed results. For the bulls, profitability continues to beat expectations allowing for continued investment for growth and authorization of a buyback. 

Conversely, the 3Q GBV growth miss will likely fuel the bear case as lower Nights booked could lead to accelerating ADR revisions towards '19 levels. McTernan continues to like ABNB's position as a category leader and share gainer with impressive FCF generation. 

Raymond James analyst Aaron Kessler had a Market Perform rating.

Kessler remained positive on ABNB fundamentals given a large nights and experiences TAM increasingly shifting to alternative accommodations; a leadership position and strong brand driving significant organic traffic; ~20% long-term revenue growth driven by a shift to alternative accommodations, global expansion, and continued innovation; and 30% plus long-term EBITDA margins. 

KeyBanc analyst Justin Patterson maintained an Overweight and $145 price target as he saw Airbnb demonstrating meaningful EBITDA and FCF generation and allocating capital appropriately ($2 billion buyback). 

Patterson views the underlying demand signals as acceptable. He saw Airbnb settling into a more normalized profile of 20%+ growth, with margins likely to persist in the low- to mid-30% range. 

Price Action: ABNB shares traded lower by 1.86% at $114.18 on the last check Wednesday.

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