On Monday, DA Davidson set a new price target for Airbnb Inc . (NASDAQ: NASDAQ:ABNB) at $131.00, up from the previous $125.00, while retaining a Neutral rating on the stock. The adjustment reflects a broader re-rating in the large-cap technology sector and a slight increase in the firm's financial projections for Airbnb.
The 2025 Gross Bookings estimate has been raised to $90,679 million, marking an 11.4% year-over-year increase. Additionally, the 2025 revenue forecast has been updated to $12,345 million, up 11.7% year-over-year, and the 2025 adjusted EBITDA prediction is now set at $4,380 million, which would represent a 35.5% margin.
Airbnb's third quarter of 2024 results surpassed expectations, with Nights/Experiences Booked reaching 122.8 million, an 8% increase year-over-year, and exceeding both the consensus of 121.4 million and DA Davidson's estimate of 122.3 million.
The company's Gross Booking (NASDAQ:BKNG) Value (GBV) was reported at $20.1 billion, up 10% both reported and excluding foreign exchange impacts, which was ahead of the $19.9 billion estimate and the consensus of $19.8 billion. Third-quarter revenues also outperformed, coming in at $3,732 million, a 10% increase year-over-year, and surpassing both the consensus and DA Davidson's forecast of $3,717 million.
The EBITDA for the quarter stood at $1,958 million, with a margin of 52.5%, which was above the consensus of $1,858 million and the estimate of $1,835 million. Additionally, the Free Cash Flow (FCF) margin for the quarter was 28.8%.
Looking ahead to the fourth quarter of 2024, Airbnb expects the growth in Nights/Experiences Booked to accelerate compared to the third quarter's 8% increase. Average Daily Rates (ADR) are anticipated to rise modestly year-over-year, driven by sustained demand for larger and higher-priced listings, along with a slight benefit from foreign exchange.
The revenue guidance for the fourth quarter is set between $2.39 billion and $2.44 billion, representing a 7.8% to 10% increase year-over-year. The high end of this range aligns with the consensus of $2.42 billion but is slightly below DA Davidson's estimate of $2.45 billion.
The implied fourth-quarter adjusted EBITDA margin guidance of around 27% falls short of the consensus of 29.7% and DA Davidson's expectation of 30%, due to increased marketing and product development expenses.
Finally, Airbnb has updated its full-year 2024 outlook. The company now expects to achieve an adjusted EBITDA margin of approximately 35.5%, up from the previous forecast of "at least 35%."
Furthermore, Airbnb continues to project a full-year 2024 Free Cash Flow (FCF) margin several points higher than the anticipated adjusted EBITDA margin. The company also anticipates Stock-Based Compensation (SBC) expense to be 25% higher than the previous fiscal year's SBC expense.
In other recent news, Airbnb Inc. has seen a series of noteworthy developments. PhillipCapital downgraded the company's stock from Neutral to Reduce, citing concerns about Airbnb's valuation premium. Despite the downgrade, the firm has slightly increased its revenue and adjusted profit after tax and minority interests estimates for the fiscal year 2024 by 1%.
On the other hand, Evercore ISI has maintained its "In-Line" rating for Airbnb, based on positive October data from AirDNA, a short-term rental analytics company. Susquehanna also maintained a Positive rating on Airbnb, raising its price target to $160 from the previous $130. The firm's analysis indicates a slight increase in the expected EBITDA and EPS for 2024, and a modest 1% increase in the 2025 revenue estimates.
These are the recent developments for the company.
InvestingPro Insights
Airbnb's financial performance and market position are further illuminated by recent data from InvestingPro. The company's impressive gross profit margin of 83.07% for the last twelve months as of Q3 2024 aligns with the InvestingPro Tip highlighting Airbnb's "impressive gross profit margins." This robust profitability metric underscores the company's efficient business model and supports the positive outlook reflected in DA Davidson's increased price target.
Additionally, InvestingPro data shows that Airbnb's revenue for the last twelve months as of Q3 2024 reached $10.84 billion, with a growth rate of 12.9%. This growth trajectory is consistent with DA Davidson's raised financial projections for the company, particularly the increased 2025 revenue forecast.
Another InvestingPro Tip notes that Airbnb "holds more cash than debt on its balance sheet," which suggests a strong financial position. This liquidity strength could provide Airbnb with flexibility to invest in marketing and product development, as mentioned in the company's fourth quarter guidance.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Airbnb, providing a deeper understanding of the company's financial health and market position.
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