Airbnb, Inc. (ABNB): A Bull Case Theory

We came across a bullish thesis on Airbnb, Inc. (ABNB) on Substack by Disruptive analytics. In this article, we will summarize the bulls’ thesis on ABNB. Airbnb, Inc. (ABNB)’s share was trading at $161.42 as of Feb 14^th. ABNB’s trailing and forward P/E were 39.27 and 35.46 respectively according to Yahoo Finance.

Airbnb (ABNB) has demonstrated stronger performance than expected, with its latest earnings report showing a 12% year-over-year sales growth. The most notable highlight was the company’s impressive EBIT margin, which positions it for continued growth. Looking ahead, ABNB is projected to achieve 11% revenue growth in 2025, with an expansion in profit margins from 23% to 26%. This positive outlook has led to a fair value estimate increase from $120 to $155 per share.

Despite a recent surge in stock price following the earnings report, ABNB is considered somewhat overvalued at the moment. However, the company continues to be a strong compounding machine, generating significant free cash flow. Management has also initiated a buyback program, which is steadily reducing the share count. ABNB is continuously refining its platform, with plans to roll out over 500 new features and upgrades in the upcoming summer release. The company’s portfolio now includes 8 million listings and 5 million hosts, supporting its steady expansion. Although the stock has been in a three-year consolidation pattern, it is expected that a further increase in profitability could drive the stock to new all-time highs, making it a promising long-term investment.

Airbnb, Inc. (ABNB) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held ABNB at the end of the third quarter which was 63 in the previous quarter. While we acknowledge the risk and potential of ABNB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ABNB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.