Weaker Demand Outlook Dragged Airbnb (ABNB) in Q3

Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The market turned volatile in the third quarter. In the third quarter, the fund returned 3.21% (gross) and 2.99% (net) compared to 3.19% for the Russell 1000 Growth Index and 5.89% for the S&P 500 Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Polen Focus Growth Strategy highlighted stocks like Airbnb, Inc. (NASDAQ:ABNB) in the third quarter 2024 investor letter. Headquartered in San Francisco, California, Airbnb, Inc. (NASDAQ:ABNB) operates a platform that connects hosts and guests. The one-month return of Airbnb, Inc. (NASDAQ:ABNB) was -0.05%, and its shares gained 5.15% of their value over the last 52 weeks. On November 12, 2024, Airbnb, Inc. (NASDAQ:ABNB) stock closed at $133.20 per share with a market capitalization of $83.22 billion.

Polen Focus Growth Strategy stated the following regarding Airbnb, Inc. (NASDAQ:ABNB) in its Q3 2024 investor letter:

“Airbnb, Inc. (NASDAQ:ABNB) declined in the period on concerns around a weaker demand outlook for the quarter as well as increasing marketing spend planned for the second half of 2024, pressuring near-term margins. Given the company’s exposure to the health of the consumer and related willingness to spend on leisure travel, we believe it’s important to take a step back to see the larger picture. Global accommodations have been and will likely continue to be a mid-single-digit growth market. Still, as private rentals become increasingly mainstream and the dependability of those private listings improves, we would expect private rentals to continue to gain market share. We continue to see Airbnb as a likely double-digit revenue grower over the next five years, and with modest margin expansion, we could expect mid-to-high-teens earnings growth.”

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Airbnb, Inc. (NASDAQ:ABNB) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 63 hedge fund portfolios held Airbnb, Inc. (NASDAQ:ABNB) at the end of the second quarter which was 56 in the previous quarter. Airbnb, Inc.’s (NASDAQ:ABNB) revenue grew 10% year-over-year in the third quarter to $3.7 billion. While we acknowledge the potential of Airbnb, Inc. (NASDAQ:ABNB) as an investment, our conviction lies in the belief that 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Airbnb, Inc. (NASDAQ:ABNB) and shared the list of stocks Jeff Bezos is buying. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.

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