With rising concerns about a recession and the recent tech sell-off, stocks are down in general. But it is a particularly difficult time for Airbnb (NASDAQ:ABNB). Having dealt with the pandemic, the company was hoping for a revival in business this year, but ABNB stock is down more than 40% so far. The stock is down to $95 today, much lower than the all-time high of $212 in February 2021 and is inching closer to the 52-week low.
The company debuted in the stock market in December 2020 and in less than two years has had quite a ride. It is too soon to push Airbnb in the dark. The company makes travel easier and it has drastically changed the way we travel for lots of people. ABNB stock looks like a steal at the current level. Let’s dig deeper into why.
It Is All About Revenge Travel
Having spent the past two years in the confines of their homes, people are ready to explore the world again. Two years of pent-up demand will likely lead to an explosive amount of travel as people finally book the dream vacation they’ve been holding out for.
According to NPR, American travel to Europe is estimated to jump 600% this year. And this surge is not limited to Europe. We have already seen a surge in airline bookings, proving this is the summer of travel. As countries slowly start opening, travel is going to rise.
With the rise in travel, there is an opportunity for property owners to earn income through short-term rentals. The increased demand could possibly lead to a rise in the number of hosts across different nations.
Airbnb already beat expectations on revenue and earnings in the first-quarter results. It reported a 70% rise in revenue despite depressed travel levels. The company had more than 100 million bookings in the first quarter only. They will likely see more bookings, longer stays, and people willing to pay more per night. For the second quarter, the company expects a revenue of $2.03 billion to $2.13 billion.
Exiting China could hamper growth in the short term, but the long-term picture looks attractive. With “work from anywhere: gaining prominence, the company has seen a rise in longer stays across its properties and will continue to do so in the coming quarters. Once the macroeconomic conditions improve, we will see a rise in longer stay bookings. Overall, expect Airbnb to beat expectations for another quarter.
Wall Street Outlook For ABNB Stock
The overall consensus for ABNB stock is bullish. Seeking Alpha’s Wall Street analyst ratings show a strong buy from 13 analysts, hold from 21 analysts and buy from two analysts. There are only three analysts who recommend a sell. That said, it will be important for the company to deliver optimal services. It is known for innovation and if it manages to ease concerns, it could help the business grow.
Given the constant uncertainty surrounding the world, Airbnb stays seems like a safe option when traveling. Airbnbs offer privacy and quality at the right price. However, there have been complaints about the inconsistency in quality across properties, which the company will have to work on. Expect solid booking numbers this quarter as Airbnb braces to make the most of revenge travel.
At $103, ABNB stock looks like a good buy.
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.