Travel hosting platform Airbnb (ABNB) is set to report its Q1 earnings this week – May 7. Its share price is up only 2.3% this year as the travel sector gets hit by the turbulence caused by the Iran war and customers feeling the effects of higher cost of living.
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According to TipRanks’ Options Tool, options traders expect about a 7.85% move in either direction in ABNB stock in reaction to its Q1 results.
What Wall Street Expects
Wall Street expects ABNB to report quarterly earnings of $0.30 per share in its Q1 report, which would mean a year-over-year increase of 25%. It is anticipated that revenues will come in at $2.62 billion, marking an increase of 15.4% compared to the year-ago quarter.
Will ABNB beat these expectations? As can be seen below, it has a mixed track record when it comes to outperformance.
Key Issues Ahead of Earnings
In Q4, ABNB’s revenue grew 12% year-over-year to $2.8 billion and gross booking value (GBV) grew 16% year-over-year to $20.4 billion. It marked Airbnb’s strongest quarter of growth in over two years. It said that pricing changes – total price upfront, simplified fees, and flexible cancellations – materially lifted conversion rates.
In Q1, this momentum is expected to have continued with predictions that its ‘Nights and Experiences Booked’ numbers will reach 156.00 million. That is up from the year-ago figure of 143.00 million. It is estimated that ‘Gross Booking Value’ will reach $27.85 billion, up from $24.52 billion last time.
However, management is likely to be asked whether they have seen any impact on demand from the Iran war both from traveler nervousness around visiting locations or the hit to airlines’ jet fuel costs and potential route cuts.
What Do Analysts Say?
Oppenheimer analyst Jed Kelly recently upgraded Airbnb to Outperform from Perform with a $180 price target helped by football fever. He said Airbnb was better positioned to absorb “travel-corridor dislocations from oil supply shocks, while benefiting disproportionately from World Cup demand, where rentals are pacing above 2025 levels in host cities.”
Stephen Ju, analyst at UBS, raised his price target on ABNB to $153 from $149 and kept a Neutral rating on the shares. Near-term uncertainty from the Middle East conflict is expected to weigh more meaningfully on Q2-Q3 consumer confidence and travel demand, he said. However, he added that current geopolitical and macro concerns are viewed as largely reflected in valuations.
Is ABNB a Good Stock to Buy Now?
On TipRanks, ABNB has a Moderate Buy consensus based on 15 Buy, 11 Hold and 1 Sell ratings. Its highest price target is $185. ABNB stock’s consensus price target is $151.75, implying a 9.28% upside.
