7) Airbnb, Inc. (NASDAQ:ABNB)
Number of Hedge Fund Holders: 56
Airbnb, Inc. (NASDAQ:ABNB) operates as a global online marketplace for lodging and tourism experiences.
The company has now become profitable. This means that its prior investments are now paying off. It goes without saying that shareholders have been benefitted as the business was a loss-making one few years ago, but it is now making 16% on its capital. This means that Airbnb, Inc. (NASDAQ:ABNB) has profitable reinvestment opportunities, and if this momentum continues going forward that can result in a multi-bagger performance.
Post handling ~140 million bookings 6 years ago, the company continues to target over 500 million nights and experiences booked in 2024, on the basis of the fact that it saw 132.6 million nights and experiences booked in 1Q 2024. This implies 9.5% rise from 121.1 million for the same period of the previous year.
Another point which makes a buying case for the company is the fact that there’s a significant opportunity for expansion in number of platform hosts over upcoming years. This is evident because its marketplace only has 5 million hosts, who have welcomed more than 1.5 billion guest arrivals.
Analysts at Tigress Financial initiated the coverage on Airbnb, Inc. (NASDAQ:ABNB), and increased their price target on the shares of Airbnb, Inc. (NASDAQ:ABNB) from $185.00 to $195.00. They gave the company a “Buy” rating on 5th April.
Polen Capital, an investment management company, released its first-quarter 2024 investor letter. It gave its views regarding Airbnb, Inc. (NASDAQ:ABNB). Here is what it said:
“During the quarter, we initiated new positions in Sage Group and Airbnb, Inc. (NASDAQ:ABNB) and added to our existing position in Globant.
Airbnb is a great business model, according to our research, due to its two-sided global network effects. For several reasons, Airbnb has a better mousetrap with its supply growth engine, with its hosts having a far lower cost of capital and more flexibility than hotels. We think private rentals should continue to grow their share of overall accommodation stays, potentially up to 30% of lodging or higher over the long term, letting the private rental gross booking value grow at a low double-digit rate. We also think Airbnb should continue to gain share within the private rental market as its global network effects strengthen, allowing for mid-teens revenue growth. With flat to rising margins over time, significant free cash flow generation, and a management team that has demonstrated its owner orientation, this should result in high-teens EPS growth over time. While the path there will not be linear, and it is a more discretionary spending-tied business, we think the long-term secular growth opportunity is very compelling.”
