Airbnb stock has dazzled and intrigued investors in growth stocks since its Nasdaq debut in December 2020. From its initial public offering price of $68 per share, ABNB stock soared as much as 223%, hitting an all-time high of 219.94 on Feb. 11, 2021.
In 2021, the travel industry faced the challenge posed by multiple strains of Covid-19, including the delta and omicron variants. But 2022 is a different story; known cases of Covid-19 have fallen sharply in most continents. Many countries have completely ended quarantine and testing requirements for incoming travelers that show proof of full vaccination. Heavy crowds at large airports across the U.S. during the summer point to a swell of tourism.
Airbnb Stock: Is It Rebounding For Real This Time?
Good news for $Airbnb, Inc.(ABNB)$. And shares are fighting back, trying to boost higher for the third straight week.
On the positive side, ABNB has jumped back above its still-falling 10-week moving average. The week ended July 15 showed a less than 3% loss. Plus, volume that week came in well below average. Quite a change from past sell-offs in the past.
On the negative side, Airbnb shares continue to underperform the general market.
As seen on the weekly chart, ABNB's relative strength line, while rising in recent weeks, is still locked in a downtrend.
At 115, ABNB still trades 46% off its 52-week peak. In contrast, the S&P 500, trading near 4155, has climbed to less than 14% off its all-time high of 4818.
Late Tuesday, the San Francisco-based company reported a bounty of profits. Earnings of 56 cents a share mark a huge swing from a net loss of 11 cents in the year-ago quarter. And sales jumped 58% to $2.1 billion, its second highest sales for any quarter.
Also impressive? That big rise in the top line came on top of a 299% boom in sales during Q2 of 2021.
So, is Airbnb stock a buy now? Or is it time lock in profits or cut losses and sell?
This story analyzes all facets of the innovator in leisure travel in terms of fundamentals, technicals and mutual fund ownership. All of these elements get inputted intoCAN SLIM, IBD's research-driven seven-point paradigm for successful growth stock investing.
Airbnb Stock Today
In March, CFRA decided to keep a $215 price target. The investment bank also boosted its fiscal 2022 earnings estimate to $1.33 a share from 76 cents and the 2023 forecast to $2.21 from $1.16.
The Street's current consensus forecast, meanwhile, has inched higher. Analysts now see profit of $1.90 a share for 2022 vs. a net loss of 57 cents last year, and $2.39 (up 26%) for 2023.
Clearly, ABNB remainsin base-building modeand is trying to bottom out. Shares went public at $68 a share in December 2020.
Last month, the stock crossed bullishly back above the50-day moving average, which has plunged to 107, is a critical step in getting the stock primed for a new breakout.
The 50-day moving average traces, on a daily chart, a stock's price trend over the 50 most recent trading sessions. Before a potential breakout to new highs, you'd like to see a growth stock rise above its 50- and 200-day lines and pull them higher.
Attractive Business Model
The San Francisco-based firm's disruptive business model: Allow house and condo owners turn their properties into short-term rentals. The idea has hatched plenty of competitors. Even large hotel chains offer similar properties in addition to their standard lodging accommodations.
On theFeb. 23 episode of IBD Live on Zoom, Jason Thomson, portfolio manager at O'Neil Capital Management, noted that millennials' desire to travel in large groups and desire to make last-minute plans make the Airbnb offering especially attractive. And that has not gone unnoticed by the major hotel chains.
"We have millions of Airbnb hosts who offer nearly every type of home in nearly every community around the world," the company wrote in a Q4 news release. Executives also noted that guests are "discovering thousands of small towns and rural communities on Airbnb" while also returning to cities. Gross nights booked at urban locales accelerated vs. Q3 and "have nearly recovered to Q4 2019 levels."
In the first quarter of 2022, Airbnb saw 102.1 million nights and experiences on its platform, and that surpassed pre-pandemic levels. Activity in North America, EMEA (Europe, Middle East and Africa) and Latin America drove the results. Gross booking value surged 67% year over year (up 71% excluding forex changes) to $17.2 billion.
Second-quarter results highlighted a quarter-to-quarter increase, albeit modest, in total nights and experiences booked to 103.7 million, up 25% year on yea. Gross booking value rose 27% vs. a year ago to $17 billion. Net income of $379 million hit the highest profitable for any second quarter in company history.
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