Airbnb, Inc. (ABNB) is demonstrating a steady performance this year, buoyed by sustained high demand within the tourism sector. In addition to that, its recent inclusion in the S&P 500 index has only increased its allure among investors.

However, there are growing apprehensions due to an increasing trend of insider selling during the past year. On September 12, 2023, Brian Chesky, CEO and Chairman, sold 150,000 company shares. This is part of a series of such transactions over the course of the past year, where Chesky sold a total of 270,000 shares.

Furthermore, on September 5, Nathan Blecharczyk, the company’s Chief Strategy Officer, also disposed of 20,000 shares, leading to a total of 60,000 shares over the past year without executing any purchases.

Adding to these concerns is New York City’s crackdown on Airbnb and short-term rentals went into effect recently, which could lead to ABNB potentially losing millions of dollars in revenue.

Given these uncertainties, it seems prudent to hold out for a more favorable investment opportunity in the stock. Below are some of its key metrics that support my bearish stance.

Tracing ABNB’s Financial Performance: Unpacking Data From Net Income to Analyst Price Target

The trend in the trailing-12-month net income of ABNB, starting from December 31, 2020, to June 30, 2023, sees a remarkable turnaround. Here are some key points:

• On December 31, 2020, ABNB recorded a substantial loss of -$4.58 billion.
• By the end of the third quarter in 2021, the net loss had slightly decreased to -$4.29 billion.
• The company then noted an immense improvement by year-end 2021, minimizing losses to just -$352.03 million.
• Positive growth emerged in the first quarter of 2022, with the company reporting a net income rise to $801.39 million, engendering a distinct shift from a loss in the previous years and quarters.
• This upswing continued through 2022, culminating with a net income of $1.89 billion by the end of the year.
• The rise in net income carried over to 2023, with the recorded numbers showcasing a steady increase: $2.03 billion at the end of the first quarter and $2.3 billion by the end of the second quarter.

The annual growth rate, measured by comparing the last value ($2.3 billion on June 30, 2023) against the first value (-$4.58 billion on December 31, 2020), reveals a significant positive growth trend for ABNB. This mirrors ABNB’s successful transition from a period of considerable loss into a trajectory of steady income gain.

 The ROA of ABNB displays a gradual improvement over the monitored period.

• On September 30, 2021, the ROA was negative at -0.33.
• A substantial increase in ROA was noted by the end of the year on December 31, 2021, where it reached -0.026.
• In the first quarter of 2022, on March 31, the trend turned positive with an ROA of 0.054.
• This positive trend continued through 2022, with the ROA reaching 0.079 on June 30 and 0.099 on September 30.
• The ROA for ABNB on December 31, 2022, was 0.111.
• Progressing into 2023, ABNB experienced a slight uptick to 0.114 on March 31 before hitting 0.125 on June 30.

Overall, the data signifies a consistent upward trend in the ROA of ABNB from September 30, 2021, to June 30, 2023. It shows the firm’s improved ability to generate profits from its assets.

Analyzing the Current Ratio of ABNB reveals several fluctuations and a general downward trend from September 2020 through June 2023. Significant Points:

• Initially, the Current Ratio was recorded at 1.65 in September 2020, reaching a peak of 1.95 by December 2021.
• However, from December 2021, it decreased consistently, arriving at the last recorded value of 1.47 in June 2023.
• In-between, the ratio underwent several fluctuations. Noticeably sharp falls followed marginal increases, such as between March 2023 (1.85) and June 2023 (1.47)

Calculating the growth rate from the first to the last value reveals a decrease of 0.17 or a negative growth of approximately 11%. This data emphasizes the typical volatility seen in financial ratios and highlights the downward trend in ABNB’s current ratio over the period from 2020 to 2023.

Here is an analysis of the data from the Analyst Price Target for ABNB:

• From November 2021 through late February 2022, the Analyst Price Target for ABNB stayed relatively stable at around $194, with slight fluctuations between $194 and $200.
• A marked decrease began in May 2022, where the price target dipped below $190 before further plummeting to $140 by mid-August 2022.
• ABNB’s Analyst Price Target seemed to stabilize again at $125 from late November 2022 until early February 2023.
• Beginning in February 2023, the price target again encountered a rise to hover around the range of $143 to $145. This increase was punctuated by a drop to $130 in mid-May 2023.
• The most recent data from September 2023 indicates that the Analyst Price Target for ABNB stood at $145.

When comparing the first recorded value from November 12, 2021 ($194), to the last from September 20, 2023 ($145), there is a decline of approximately 25.25%. This suggests an overall downward trend across the evaluated period despite intermittent stability and short-lived increases.

Airbnb Inc.’s Stock Evolution: Notable Fluctuations and Key Trends in 2023

From the provided data, the share price of Airbnb Inc. (ABNB) shows a mixed trend initially followed by an accelerated increase up until mid-July 2023, after which the growth seems to decelerate. Below is a detailed chronological description of ABNB’s price movements:

• On March 24, 2023, the share price was $116.66.
• There was slight growth to $119.95 on March 31, 2023.
• This was followed by a minor dip and fluctuation through April, with prices ranging between $116.17 (April 6, 2023) and $117.48 (April 21, 2023).
• In May 2023, the prices witnessed vacillations again, peaking at $119.42 on May 5 before dropping to a low of $106.57 by May 26, 2023.
• June 2023 saw a rebound, with the value increasing from $110.86 on June 2, 2023, to $126.67 by the end of the month.
• The most significant uptrend took place in July 2023. Starting at $130.63 by July 7, 2023, the share value expanded to $149.80 by July 28, 2023, evidencing rapid growth.
• However, this trajectory began to decelerate after reaching its peak in July. The prices fell consistently in August, starting from $145.81 on August 4, 2023, and hitting a low of $125.96 by August 25, 2023.
• Finally, in September 2023, we see another rise, with the price reaching $145.57 by September 15 before a slight dip to $142.06 on September 19, 2023.

In conclusion, the data indicate an overall upward trend over the assessed period, with some periods of deceleration and acceleration. It’s evident that share prices peaked in late July 2023 but started to decelerate thereafter, even though they remained on a broader upward trajectory compared to the initial price in March 2023. Here is a chart of ABNB’s price over the past 180 days.

Understanding ABNB’s Performance: Analyzing Quality, Momentum, and Growth Dimensions

ABNB has an overall C rating, translating to a Neutral in our POWR Ratings system. It is ranked #15 out of the 21 stocks in the Travel – Hotels/Resorts category.

Based on the POWR Ratings for ABNB, the three most noteworthy dimensions are Quality, Momentum, and Growth.

Quality:

• Consistently, Quality has remained at a high since March 2023 and sustained the perfect score of 100 through September 2023. This signifies that ABNB delivers excellent performance regarding profit margin, free cash flow, and other key financial metrics.

Momentum:

• This dimension started with a score of 73 in March 2023 and saw an optimistic trend, reaching 88 in July 2023. While there is a slight decrease in momentum to 77 by September 2023, the overall forward trend suggests ABNB has a positive price performance.

Growth:

• The Growth score had an initial value of 87 in March 2023. However, it significantly dropped to 30 by September 2023, marking a decreasing trend. Despite this drop, Growth remains a critical dimension to monitor, as it reflects ABNB’s earnings growth rate.

How does Airbnb, Inc. (ABNB) Stack Up Against its Peers?

Other stocks in the Travel – Hotels/Resorts sector that may be worth considering are Genting Berhad (GEBHY), Bluegreen Vacations Holding Corp. (BVH), and           Genting Singapore Limited (GIGNY) — they have better POWR Ratings.

What To Do Next?

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ABNB shares were trading at $141.06 per share on Wednesday afternoon, down $0.79 (-0.56%). Year-to-date, ABNB has gained 64.98%, versus a 17.34% rise in the benchmark S&P 500 index during the same period.

About the Author: Subhasree Kar

Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...

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