- Q4 earnings beat Street estimates
- Strong demand in China and Brazil
- Plans to create the Amazon of travel
Short-term lettings platform Airbnb (ABNB:NASDAQ) jumped more than 14% on Friday (14 Feb) to $161.2, the biggest one day move in the shares since listing on Nasdaq in 2020, after the company reported better than expected fourth quarter earnings and announced bold expansion plans.
The gain took the market value of the company back above $100 billion, with the shares trading in a wide range between $80 and $200 since its IPO (initial public offering).
Airbnb said nights booked by outbound Chinese tourists increased by 25% in the three months to December 2024, while in Latin America growth touched 30%, led by Brazil.
Growth in expansion markets grew twice the rate of the firm’s core markets, with Morningstar analyst Dan Wasiolek commenting: ‘This instills confidence in our forecast for international markets to add tens of billions in bookings over the next several years.’
Airbnb reported fourth quarter revenue of $2.48 billion, topping consensus estimates of $2.42 billion, according to Refinitiv data, and EPS (earnings per share) of $0.73 compared with analysts’ forecasts of $0.53.
AMAZON OF TRAVEL
The company said it will invest between $200 million and $250 million in a new travel-related service which is expected to be launched in May 2025, which is part of a wider aim to become the Amazon of travel.
It involves launches one or two businesses a year over the next five years and then scaling them up. CEO Brian Chesky said: ‘I think that each business could take three to five years to scale. A great business could get to a billion dollars of revenue.’
‘We’re going to have one app, one brand, the Airbnb app. We want the Airbnb app kind of similar to Amazon (AMZN:NASDAQ), to be one place to go for all of your traveling and living needs,’ added Chesky.
Analyst Ralph Schackart at William Blair said: ‘Over the longer term, the company has the opportunity to add incremental growth drivers such as experiences, among others, and the stock should grow at least in line with revenue growth.’
