What happened:
Shares of online accommodation platform Airbnb (NASDAQ:ABNB) rose 5.8% in the morning session after Bernstein SocGen Research Group reiterated its Buy rating on the stock, arguing that the current pessimism surrounding Airbnb is overdone. The analysts added that Airbnb’s revenue growth potential could be significantly more than 10%, especially with stable margins. After the initial pop, shares cooled to $122.08, up 3.9% from the previous close.
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What the market tells us:
Airbnb shares are quite volatile, having seen 9 moves of more than 5% in the past year. In that context, today’s move indicates that the market sees this news as meaningful, but not something that would fundamentally change perceptions of the company.
The biggest move we’ve written about in the past year was about a month ago, when the stock fell 16.6% on news that the company was reporting second-quarter earnings. Bookings were slow and revenue guidance for the next quarter fell short of Wall Street estimates. The company said, “…we’re seeing shorter lead times for bookings globally and signs of softer demand from U.S. guests.” On the other hand, revenue came in slightly ahead and adjusted EBITDA beat by a more convincing amount. Overall, this was a mixed but weaker quarter for Airbnb.
Airbnb has fallen 9.2% since the beginning of the year, trading at $122.08 per share, 27.4% below its 52-week high of $168.18 set in March 2024. Investors who purchased $1,000 worth of Airbnb shares at its December 2020 IPO would now be looking at an investment worth $843.68.
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