San Francisco based marketplace Airbnb (NASDAQ:ABNB) is enjoying a travel surge as the pandemic seemingly fizzles out. While it suffered during the pandemic, the company could be the strongest player in its sector. ABNB stock has picked up since the spread of the pandemic started slowing down, hitting a high of $212 in November 2021. However, it is now trading close to $167 with massive upside potential in the coming months.
I have always loved ABNB stock and have a lot of faith in the company’s potential to transform the travel industry.
The company is consistently growing and has adopted technology that makes it easier for hosts as well and guests to use the platform. It is already giving stiff competition to some of the top hospitality companies across the world.
Airbnb will continue to be a big part of the travel industry. With that in mind, let’s dig deeper into my bullish case of ABNB stock.
The Post-Pandemic Travel Will Benefit Airbnb
Airbnb has more than 4 million hosts on their platform and it achieved more than 1 billion all-time guest arrivals. Despite the pandemic, nothing could slow the growth momentum of the company and this is proof that it is here to stay. It has generated $150 billion in earnings for hosts, getting revenue by taking cuts from hosting fees.
The remote work culture has given a boost to the travel industry as professionals move from place to place while still working their jobs. This has led to a surge in Airbnb bookings as compared to hotels.
The company had 20% of its stays booked in the fourth quarter for a month or more. Airbnb has an edge over hotels since it can offer bookings just about anywhere their hosts are, as opposed to the limited amount of literal ground hotels can occupy.
There has also been a surge in travelers globally. Having spent almost two years at home, people are now keen to go on vacation and travel thanks to two years of pent-up demand. However, people may avoid hotels so they don’t have to share amenities with other guests or have concerns about safety with regards to covid-19. This is where Airbnb stands to benefit.
The Bottom Line on ABNB Stock
Despite the solid fourth-quarter results, Airbnb has predicted lower revenue growth in the first quarter. But this should not affect the fundamentals of the company. As we move out of the impact of the pandemic and return to normal travel and leisure, there will be a surge in Airbnb bookings and it will impact the bottom line.
The company is in a great place today and has massive growth potential. Even during the height of the pandemic, Airbnb showed tremendous strength and solid management. This will ensure that the company continues to dominate the travel industry and I believe the stock has the potential to hit $200 in the coming months.
The last time I wrote about Airbnb, I had mentioned that Omicron is no big threat to the company and the stock is a buy. I still stand by my opinion. Sitting around $167 per share, ABNB stock has a market cap of $107 billion. Trading well below its 52 week high of $212.58, this is a great buying opportunity for ABNB stock.
The company is here to change the world of travel and its success over the past few years is proof that it has the potential and the ability to scale. Buy ABNB stock on the dip and hold for the long term.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
