Airbnb Inc (NASDAQ:ABNB, ETR:6Z1) will report its second quarter earnings on Wednesday with Bank of America analyst expecting the alternative accommodation provider to deliver modest upside, with nights booked and revenue set to exceed Wall Street estimates.
The company has guided revenue between $2.99 billion and $3.05 billion, representing year-over-year growth of 9% to 11%.
Nights and Experiences Booked and adjusted EBITDA are both guided to be higher year-over-year, without Airbnb providing specific figures for each measure.
“We expect a modest beat in Q2 for nights and revenues given third party data and stable nights growth reported by Booking.com,” Bank of America’s analysts wrote, adding that “EBITDA could come in higher if Airbnb spent less on marketing new products.”
Wall Street is expecting bookings to rise 7% to $22.7 billion and revenue to increase 10% to $3.03 billion. Foreign exchange tailwinds could also provide a slight lift.
A key area of focus will be Airbnb’s newly launched Experiences platform, rolled out in May as part of a redesigned app, the analysts wrote.
“With an average Airbnb trip of four nights, we estimate achieving an incremental 5% trip penetration for experiences/services, possibly by Q4, could lift nights/experiences booked by 1.25%,” the analysts wrote.
While management is likely to strike an upbeat tone, “Street sentiment on experiences (both for bookings impact and lift in customer frequency) is guarded with a limited benefit in Street estimates,” analysts added.
Looking ahead, the bank’s analysts expect Airbnb to guide Q3 nights booked growth of 6% to 7%, in line with consensus estimates of 7.1%.
Average Daily Rate (ADR) and bookings could see a modest foreign exchange benefit versus Street estimates, they added.
The analysts maintained their ‘Neutral’ rating and $146 price objective on Airbnb, citing fair valuations and limited near-term upside compared to faster-growing gig economy and eCommerce peers.
“Given relatively in-line room night growth, traction for new opportunities remains important for stock, but we aren’t expecting an inflection this quarter,” they wrote.
Airbnb shares traded hands at $130 on Tuesday, down about 1% so far in the year to date.