4. Airbnb, Inc. (NASDAQ: ABNB)
Number of Hedge Fund Holders: 68
Home rental platform Airbnb, Inc. (NASDAQ: ABNB) ranks 4th in our list of the best summer stocks to buy now. The travel platform went public at the end of 2020, and its stock has risen 22% from its initial public offering price of $146 per share. The company now has a market cap of $93.4 billion. Airbnb currently has 4 million hosts in 200 countries that have hosted 800 million guests, and the company is trying to attract millions more to meet potential demand.
The company’s revenue in the fourth quarter of 2020 was $859 million, easily exceeding analysts’ expectations of $748 million, and full-year revenues were just down 30% to $3.4 billion compared to 2019. Needham analysts initiate coverage of Airbnb, Inc. with a Buy rating and a $210 price target.
There were 68 hedge funds that reported owning stakes in Airbnb, Inc. (NASDAQ: ABNB) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $1.61 billion.
Blue Hawk Investment Group said that Airbnb, Inc. has a desirable growth profile due to its charismatic position in the travel ecosystem in its Q4 2020 investor letter:
“We typically avoid new issues, with ABNB being a rare exception. ABNB fits right into our wheelhouse as a leader in a promising industry, with a disruptive business model, unique company culture, massive addressable market, and a name synonymous with a category (“got an Airbnb for the weekend”). Towards the end of the year, the narrative of the hot IPO/SPAC environment we found to be fitting, with an exception. We believe grouping ABNB into this category is a mistake. The IPO was botched, but the mistake was the initial offering price being far too low in this case. We believe the reason for this initial mispricing was the proximity of the IPO to the vaccine effectiveness data release. The data turned out to be much better than anticipated, a blue-sky result, causing a drastic change in the outlook for travel and lodging, the industry in which ABNB operates. Bayes Theorem in action, people typically have a bias when incorporating new information, in that they do not adjust their view as quickly as they should, and the vaccine data release required an almost complete reversal of views.
Back to the company, we started buying on day one and continued to build a position into the $120s and $130s. A founder-led firm, we believe the company has an excellent management team, a very attractive growth profile with many levers at their disposal, and embedded optionality due to their attractive position in the travel ecosystem (and minimal reliance on Google). The most underappreciated aspect of the story is the attractiveness of the financial model. Not many IPOs come along that get us excited, but we believe the future is bright for this young company. We will reveal more details about our thesis in future letters.”
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