2. Airbnb, Inc. (NASDAQ:ABNB)
52 Week Range: $110.38 – $170.10
Current Share Price: $114.98
Number of Hedge Fund Holders: 63
Market Capitalization as of September 4: $72.71 Billion
Airbnb, Inc. (NASDAQ:ABNB) is a consumer cyclical company that operates a platform that enables hosts to offer stays and experiences to guests worldwide. It connects hosts and guests online or through mobile devices to book spaces and experiences by offering private rooms, primary homes, and vacation homes. Based in San Francisco, California, Airbnb has transformed the travel sector with its distinctive service that enables people to list and reserve places to stay globally.
Airbnb, Inc. (NASDAQ:ABNB) is maneuvering through a challenging environment as it prepares for anticipated increases in bookings for nights and experiences later in the year. These forecasts are made against the context of tougher comparisons year over year. The focus on experiences by the company is particularly noteworthy, with the impact on profit margins being closely observed.
Airbnb, Inc. (NASDAQ:ABNB) delivered another solid second quarter as revenues rose 11% year over year to$2.75 billion. Net profit came in at $555 million, indicating a net profit margin of 20 percent. The Adjusted EBITDA figure climbed by 9%, leading to an EBITDA Margin of 33 percent. During the quarter, the company produced $1 billion in Free Cash Flow (FCF), taking its total free cash flow to $4.3 billion, a record high.
The strong cash flow allows the company to return value to shareholders by the $749 million spent on buybacks in the quarter. Additionally, the remarkable gross profit margin of 82.86% is a point of interest for investors, highlighting Airbnb’s success in keeping a large share of its earnings as gross profit.
Airbnb, Inc. (NASDAQ:ABNB)’s careful management of finances, evidenced by its higher cash reserves compared to its liabilities on its financial statement and its liquid assets surpassing its immediate financial commitments, points to robust financial health.
In the second quarter of 2024, 63 hedge funds invested in Airbnb, Inc. (NASDAQ:ABNB), with positions worth $2.62 billion. As of June 30, 2024, the company’s biggest shareholder is Renaissance Technologies, and the firm has a position worth $$515.76 million.
Here is what Polen Capital, an investment management company, said about Airbnb, Inc. (NASDAQ:ABNB) in its first-quarter 2024 investor letter:
“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.”
