Short-term rentals marketplace Airbnb (ABNB) recently reported stellar third quarter figures, with revenues at $2.9 billion, up 29% YoY, compared to $2.2 billion a year ago, notes Todd Shaver, editor of Bull Market Report.
The company posted a profit of $1.2 billion, or $1.79 per share, compared to $834 million, or $1.22. Despite a strong showing and a handy beat on estimates, the stock is down by 12% since the results.
The company’s fourth quarter projected revenues of between $1.80 to $1.88 billion came in below the Wall Street consensus midpoint of $1.85 billion, which is a silly reason for the selloff. Especially with Airbnb posting a record-breaking quarter across the board, with 100 million in nights and experiences booked, up 25% YoY, and nearly $16 billion in gross booking values, up 31% YoY.
Airbnb’s new services, initiatives, and programs continue to gain traction, starting with AirCover which provides extensive liability protection for hosts, as well as guests. This is followed by Ask A SuperHost, and Airbnb Categories, all of which have done well when it comes to onboarding new hosts, and increasing average revenues per guest, all the while adding substantial value in the process.
During the quarter, the company witnessed a steady increase in long-term stays of 28 days or more, accounting for as much as 20% of the total nights booked on the platform.
The platform further witnessed a stellar recovery on cross-border and urban bookings, up from 33% to 43%, and 29% to 48%, on a YoY basis, respectively. This is largely the result of the reopening of global borders, along with flexible work schedules that have since allowed workers to travel and work from exotic locations.
Such a stellar performance in the face of currency headwinds, broad-based uncertainties, and persistent lockdowns in China is no small feat, and as such the recent pullback is an opportunity to double down on this stock.
With $9.6 billion in cash, just $2.4 billion in debt, and $3.2 billion in cash flow, the company stands to offer a lot of value to shareholders, especially pertaining to its up-and-coming $1 billion stock repurchase program.
This company has disrupted the overnight stay business and has great management, with continued new ideas on how to help people travel the globe. We are happy investing in this management team, that is in just the 2nd inning of a 9-inning game.
