Investing.com -- Airbnb struck an upbeat tone on guidance Thursday but reported mixed third-quarter results as earnings fell short of estimates, sending its shares lower premarket on Friday.
Airbnb Inc (NASDAQ:ABNB) shares fell more than 5%, reversing an initial strong rally following the report.
The company reported EPS of $2.13 on revenue of $3.73 billion, compared with Wall Street estimates for EPS of $2.14 on revenue of $3.72B
Nights and Experiences booked increased 8% compared to the prior year, driven by continued growth in all regions.
Average daily rate was $164 in Q3 2024, increasing 1% compared to Q3 2023.
Looking ahead to Q4, the company guided revenue in a range of $2.39B to $2.44B, compared with Wall Street estimates for $2.42B.
"We anticipate that our implied take rate in Q4 2024 will be slightly lower on a year-over-year basis, primarily due to one-time benefits recognized from unused gift cards in Q4 2023," the company said.
Here's how Wall Street analysts reacted to the report:
BTIG: "While 3Q upside and talk of accelerating room night growth should lead consensus higher on the topline, a below-Street margin outlook for 4Q is raising some questions around the 2025 margin profile as ABNB moves into an investment cycle." The firm added that it continues to see ABNB's valuation as challenging as growth converges with lower multiple peers.
Bank of America: "The quarter was better than expected as of July, and nights growth at 8% was in line with Booking (NASDAQ:BKNG). While Airbnb is expanding its geographic reach, and has a number of new growth initiatives to help to capitalize on its large bookings ecosystem, core nights growth is in line with peers and the margin growth seems less likely in 2025." BofA raised its target for the stock to $154 from $142, maintaining a Neutral rating.
Morgan Stanley (NYSE:MS): "Near-term top line trends are solid, but [the] 4Q EBITDA miss and continued comments about investment into ‘25 create margin and payback timing uncertainty."
Barclays (LON:BARC): "As BKNG demonstrates continued outperformance in Airbnb's core category, we think investors come to our view that ABNB should trade at a discount to its more diversified OTA peer, pending greater visibility on the long-awaited adjacency push." Barclays lifted its target for the stock to $110 from $100, but kept an Underweight rating on Airbnb.
Truist: "While 3Q revenues were roughly in-line with expectations, Adj. EBITDA margins 250 bps. better than consensus drove Adj. EBITDA $100M (+5%) higher than what the Street was looking for. However, it looks like the opposite scenario for 4Q where implied margins are roughly 300 bps. lower than consensus with the net implied impact for 4Q Adj. EBITDA being approx. $80M (-11%) below Street expectations."