Airbnb didn't feel the post-pandemic demand tailwinds alone Delta Air Lines ( DAL) and Hyatt ( H), among others in the travel industry, surged this year from pandemic levels. We believe Airbnb experienced demand tailwinds in the post-pandemic, driven by pent-up travel demand during the pandemic. 4Q22 & what to expect nextĪirbnb's 4Q22 inspired long-awaited investor confidence in the stock the company reported GAAP EPS of $0.48, beating expectations by $0.21, and revenue of $1.9B, above expectations by $40M. The stock price remains volatile in the near term and is trading well above the peer group average hence, we recommend investors wait for a better entry point toward the end of the year.
We recommend investors against jumping into the stock yet. We believe the company's flywheel business model may be in imbalance as customers have less disposable income to allocate to traveling amid a rough macro environment. Still, we don't believe it's immune to near-term macro headwinds. Airbnb is a Tech Stock Pros favorite in the online travel industry, mainly because its business model builds on itself, what we coined as the flywheel - the more customers demand listings, the more hosts sign up with new listings. The stock dropped nearly 26% over the past year, but we're seeing a slight recovery this year, with the stock growing 45% YTD after the company beat bottom and top growth lines in 4Q22 and guided revenue above consensus for 1Q23. The following graph outlines our rating history on Airbnb. The stock's valuation has compressed since our last note in mid-October, but we still believe the stock is overvalued at current levels. We see the stock pulling back from current levels as fewer consumers prioritize spending in the current macroeconomic backdrop. Our bearish sentiment is also based on our belief that the stock is due for further multiple compression.
We're guarded on Airbnb's revenue growth in the first half of 2023 due to the weaker spending environment caused by persisting inflationary pressures. We remain sell-rated on Airbnb ( NASDAQ: ABNB).
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