What Happened:
Shares of online accommodations platform Airbnb (NASDAQ:ABNB) jumped 5.8% in the morning session after Bernstein SocGen Research Group reiterated their Buy rating on the stock, arguing that the current pessimism surrounding Airbnb is overdone. The analysts added that Airbnb's revenue growth potential could significantly surpass 10%, especially with stable margins. After the initial pop the shares cooled down to $122.08, up 3.9% from previous close.
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What is the market telling us:
Airbnb’s shares are quite volatile and over the last year have had 9 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about a month ago, when the stock dropped 16.6% on the news that the company reported second-quarter earnings results. Its bookings missed and its revenue guidance for next quarter missed Wall Street's estimates. The company said "...we are seeing shorter booking lead times globally and some signs of slowing demand from U.S. guests." On the other hand, revenue beat slightly, and adjusted EBITDA beat by a more convincing amount. Overall, this was a mixed but weaker quarter for Airbnb.
Airbnb is down 9.2% since the beginning of the year, and at $122.08 per share it is trading 27.4% below its 52-week high of $168.18 from March 2024. Investors who bought $1,000 worth of Airbnb’s shares at the IPO in December 2020 would now be looking at an investment worth $843.68.
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