Airbnb Inc (NASDAQ:ABNB) may have missed estimates for Nights & Experiences booked in the fourth quarter of 2022, but revenue and adjusted underlying earnings (EBITDA) came in noticeably better, according to a report from Canaccord Genuity (TSX:CF, LSE:CF).
Combined with a strong outlook for the first quarter of 2023, analysts at the firm have maintained a ‘Buy’ rating and upped their price target for the stock to $165 from $145.
The travel firm’s shares are currently worth about $136 after jumping close to 14% following the release of its 4Q results.
READ: Airbnb surprises with first annual profit, helped by strong demand in 4Q
“Demand remains strong in all regions, aided by increased cross-border travel and a return to urban stays, and supply growth was also strong, with the company adding nearly one million listings over the course of 2022,” the Canaccord analysts wrote.
“Management expects these trends to continue into 1Q, with guidance for 16-21% y/y revenue growth coming in well ahead of expectations, reflecting an expected mix of flat sequential growth in Nights & Experiences Booked and pressure on ADR (average daily rates) as shorter, lower-cost urban stays expand within the mix as COVID-era "work from anywhere" longer suburban stays return to more normalized levels.”
For the first quarter of 2023, the analysts said Airbnb expects the growth rate for Nights and Experiences Booked to be nearly flat quarter-over-quarter (q/q) but up 20% y/y, with ADR down slightly y/y due to a mix shift toward urban stays.
Looking forward
The company’s 1Q revenue guidance of $1.75 billion to $1.82 billion is well ahead of consensus at $1.68 billion and represents 16-21% y/y growth, inclusive of an approximately 200 basis points foreign currency headwind, they added.
Additionally, they said Airbnb expects its 1Q adjusted EBITDA margin to be down slightly y/y from 15.2% in 1Q22, primarily driven by changes in the timing of brand marketing spend, noting that its full-year 2023 adjusted EBITDA margin should be roughly in line with the strong approximately 34% margin it generated in 2022, helped by cost efficiencies.
“Shares of ABNB were up ~50% YTD heading into these results, and the stock is reacting favorably after hours as investors embrace the likelihood that the company will continue aggressively taking share from the traditional travel market, which should help power through any pockets of economic weakness for years to come,” the analysts said.
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