Wells Fargo’s Best Growth Stocks: 28 Stocks With The Highest Consensus EPS Growth Estimates

14. Airbnb, Inc. (NASDAQ:ABNB)

Consensus Long-Term EPS Growth Estimate: 16%

Number of Hedge Fund Holders: 63

Airbnb, Inc. (NASDAQ:ABNB) is the most well-known travel accommodation services provider in the world. Since it’s a hospitality firm, its hypothesis depends on gross bookings, which in turn are driven by the travel industry and consumer spending power. However, even though Airbnb, Inc. (NASDAQ:ABNB) is the largest company of its kind and a brand name in its industry, the shares are down 1.5% year to date. The pessimism is attributed partly to rising costs, with Airbnb, Inc. (NASDAQ:ABNB)’s 34% operating expense growth between 2022 and 2023 outpacing its 17.8% revenue growth. Additionally, global inflation which is driven by housing costs has also seen governments crack down on short-term rentals to increase housing supply. Subsequently, Airbnb, Inc. (NASDAQ:ABNB)’s hypothesis depends on its growth initiatives such as a focus on long-term rentals and co-hosting can play a larger role in its hypothesis along with cost control.

Polen Capital mentioned Airbnb, Inc. (NASDAQ:ABNB) in its Q3 2024 investor letter. Here is what the fund said:

“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.”