To survive a global pandemic as a predominantly short-term and vacation rental service is no easy feat, but Airbnb, Inc. (ABNB) pulled it off. Governments around the world mandated strict lockdowns to slow the spread of COVID-19, and in the middle of it all, Airbnb went public. The vacation experience platform recently reported its quarterly earnings, showing pre-pandemic levels of bookings and a normalizing travel environment.
Reporting on this was Brian Fitzgerald of Wells Fargo, who was encouraged by the continuing momentum in long-duration stays, despite the additional rebound in short-term rentals and international travel. These longer bookings are the most rapidly expanding category by trip length, and North Americans are anticipated to spend big this summer.
Fitzgerald rated the stock a Buy and raised his price target to $250 from $225. This new target represents 12-month upside potential of 33.95%.
In its earnings report, Airbnb highlighted its higher-than-expected revenue and raised its guidance. The company has been innovating on its platform to stay ahead of consumer trends and is currently experiencing a sky-high level of supply.
Over the last quarter, ABNB’s earnings results suggested a slight impact from Omicron, although, in many ways, these have already been mitigated, and demand has since bounced back. Moreover, the overall difficulties brought on by the Omicron variant of COVID-19 were far less serious than with Delta and past waves, indicating a brighter future with less coronavirus-linked uncertainty.
Robust bookings growth of 20% year-over-year have been observed thus far in 2022, and at least, for the firm’s North America segment, the Summer should be a productive one.
Summarizing his hypothesis, Fitzgerald stated that Airbnb commands “a very large market; leading competitive positioning in short-term rentals; a very strong management team led by a visionary founder; a business model that has proven resilient through the COVID-19 pandemic.”
On TipRanks, ABNB has a Moderate Buy analyst consensus rating based on 9 Buy, 16 Hold, and 1 Sell rating. The average Airbnb price target is $201.48, indicating 12-month upside potential of 7.95%. ABNB closed trading on Wednesday at $186.64 per share.
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