Lodging firm Airbnb (ABNB) is preparing to release its second-quarter earnings results on August 6 after the market closes. Wall Street expects revenue to come in at $3.03 billion, which would represent a year-over-year growth of about 10.2%. At the same time, earnings per share are projected to be $0.94, roughly 9.3% higher than the same period last year. While this growth is solid, it comes as momentum in the United States is slowing down due to softening consumer spending on travel. In contrast, markets in Latin America have shown stronger growth and have helped partially offset the slowdown.
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Nevertheless, margins for the second quarter are expected to be slightly lower due to heavier marketing spend, as Airbnb rolls out new features for the summer travel season and continues to grow its ecosystem beyond short-term rentals. Interestingly, the company has already committed between $200 million and $250 million to these plans, which it believes will open up opportunities to expand into other areas of travel services.
Looking ahead, Airbnb reaffirmed its forecast for a full-year adjusted EBITDA margin of at least 34.5% in its previous earnings report. As a result, investors will be waiting to see if the firm will maintain its guidance or exceed it, as any negative comments about its outlook will likely send the stock lower. In fact, investors are currently cautious about near-term risks such as weaker leisure trends in the U.S. and increased marketing costs. Therefore, the upcoming earnings report will provide a clearer picture of whether Airbnb’s strategy is paying off.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. Indeed, the at-the-money straddle suggests that options traders expect a large 8% price move in either direction. This estimate is derived from the $129 strike price, with call options priced at $5.85 and put options at $4.61.
Is ABNB Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on ABNB stock based on seven Buys, eight Holds, and six Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average ABNB price target of $134.67 per share implies 4% upside potential. Interestingly, TipRanks’ AI analyst has an Outperform rating and a $150 price target.
