Airbnb maintains neutral rating, firm price target at $140 via Investing.com
On Wednesday, B. Riley kept neutral on Airbnb Inc. (NASDAQ: ABNB ), reiterated their $140.00 target price on the company's shares. Highlighting the importance of Airbnb's co-working network introduced in its winter 2024 update, the company saw this feature as an important development. The network, which has gathered more than 10,000 co-hosts in ten countries, is designed to meet the constantly expressed demand from hosts and is expected to improve the offer of the platform.
An analyst from B.Riley commented on the potential of the shared hosting service to increase the availability of the Airbnb experience, which is scheduled to be relaunched in 2025. Although Airbnb does not currently monetize co-hosting, there are expectations that it will in the future, increasing the company's revenue and EBITDA.
Despite the introduction of co-hosting, which may be seen as competition for professional hosts on Airbnb, the impact is not expected to be significant. This expectation is based on third-party data showing that the majority of bookings for professional hosts are made through Airbnb.
The company's analysis suggests that the new service will not only meet the needs of hosts but will also provide a growing opportunity for Airbnb to continue monetizing its platform. Although the shared hosting feature is not yet a revenue generator, its future potential is recognized in the company's comments.
In other recent news, Airbnb has been focusing on a few analyst notes and market developments. KeyBanc Capital Markets maintained a Sector Weight rating on Airbnb, acknowledging the company's introduction of new features, including the Co-Host Network, designed to facilitate the expansion of offerings by streamlining the hosting process. Airbnb's innovation is expected to improve the guest experience and improve conversion rates by integrating individual preferences and needs.
At the same time, Raymond James began covering Airbnb with Market Performance ratings, citing long-term opportunities but warning of near-term EBITDA growth limits due to investments in growth plans. Bernstein SocGen Group and Mizuho Securities maintained an Outperform rating, suggesting the market's pessimism may be overstated, while BTIG and Cantor Fitzgerald maintained neutral, emphasizing the need for clear visibility into growth-accelerating plans.
The presence of Airbnb has significantly changed the rental market of Rio de Janeiro, especially in the most popular tourist area of Ipanema, with a 24% increase in short-term rentals since 2019. However, the rise of short-term rentals has led to concerns among property managers. and potential regulatory pushbacks.
Finally, Airbnb's operation in Greece may have the effect of promoting a three-year tax for landlords who move from short-term to long-term rental. The move is part of Greece's strategy to deal with the housing shortage and control overcrowding. Airbnb has expressed its willingness to cooperate with the Greek government in this matter.
InvestingPro Insights
Airbnb's financial metrics and market performance provide additional context to B.Riley's analysis. According to InvestingPro data, Airbnb boasts a market capitalization of $85.67 billion and an impressive 82.59% net profit margin for the last twelve months through Q2 2024. This is in line with one of InvestingPro's tips, which highlights “high capital gains” of Airbnb. “
The company's P/E ratio stands at 17.8, which is low relative to its growth prospects. This is reflected in another InvestingPro Tip that suggests Airbnb “trades at a low P/E ratio relative to near-term earnings growth.” This measurement metric may be particularly relevant as the company explores new revenue streams such as the collaborative network mentioned in the article.
Additionally, Airbnb's strong financial position is underscored by InvestingPro Tip noting that the company “carries more cash than debt on its balance sheet.” This financial stability may give Airbnb the ability to invest and expand initiatives such as co-hosting services and relaunching experiences in 2025, as discussed in the article.
For investors looking for a comprehensive analysis, InvestingPro offers 11 additional tips for Airbnb, providing a deeper understanding of the company's financial health and market conditions.
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