Why Is Airbnb (ABNB) Stock Down Today?

It has been a rather shaky day for various travel-related stocks. For shareholders in Airbnb (NASDAQ:ABNB), this is certainly the case. Currently, ABNB stock is down more than 5% on heavier-than-usual volume.

Person holding Airbnb logo over the cityscape of Rome, Italy. ABNB stock.
Source: Kaspars Grinvalds / Shutterstock

Such moves typically come as a result of multiple factors. This week, there are a couple of key drivers that investors are watching with travel stocks.

The first key driver is an upcoming Federal Reserve decision on interest rate hikes. Right now, the market is pricing in a full 50 basis points (bps) of increases during this session, with more on the horizon. However, investors appear to be remaining cautious with respect to certain stocks. Travel is one sector of the economy that people seem to think will be more sensitive to this move than others.

On top of that, it’s also earnings season right now. Airbnb is scheduled to release earnings after market close today.

So, let’s dive into why investors are selling ABNB stock ahead of earnings.

Why Is ABNB Stock Down Today?

Expedia (NASDAQ:EXPE) reported earnings before the bell today. Despite what appeared to be strong earnings which met or exceeded analyst expectations — and a rosy outlook — EXPE stock dropped. It appears that Expedia didn’t meet the market’s expectation for earnings, which can be more important than what analysts think.

In this environment, travel stocks are looking more and more like difficult names to trade or hold for extended periods of time. Investors are jittery right now. They appear to be taking the view that good isn’t good enough. Given today’s decline in EXPE stock, shareholders in ABNB stock appear to be selling off in sympathy.

Now, that’s not to say that Airbnb won’t blow its numbers out of the water. That’s possible. Perhaps the market is getting too bearish.

However, for now, investors seem to be content to sit on the sidelines and wait out this volatility. Personally, I think this view makes sense, although it does also present potentially interesting buying opportunities for long-term investors.

On the date of publication, Chris MacDonald did not hold (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.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


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