Airbnb's 135% Rally Takes IPO Crown With Room to Run
Airbnb's revenue grew to $1.53 billion in the fourth quarter, as people spread out over thousands of towns and cities with workers no longer having to be in traditional offices five days a week.
April 13, 2022 at 01:56 PM
3 minute read
With shares skyrocketing since its trading debut, Airbnb Inc.'s initial public offering was well-timed. That rally shows little sign of abating.
It has soared 140% since it went public in December 2020. The timing was auspicious: COVID-19 vaccines were just arriving, sparking a revival in travel and also demand for lodging where travelers could isolate more easily than in a hotel. Employees also embraced a work-anywhere environment, encouraging the use of temporary homes.
And investors have more reasons to stay bullish. Airbnb's stock is expected to climb by an average of 22% over the next 12 months with a majority of the 41 analysts covering the firm recommending investors hold on to their shares or buy more, according to data compiled by Bloomberg.
"It is evolving, and becoming an interesting play with respect to work-from-home and long-term rental trends," said Thomas George, a portfolio manager at Grizzle Investment Management, which owns the stock. "Those are additional levers it can unlock for growth."
Brokerages on average predict the company next month will report a 64% jump in first-quarter sales. Airbnb, which was profitable on a net-income basis the past two quarters, probably lost money again in the first three months of this year, analysts say.
Its revenue grew 78% to $1.53 billion in the fourth quarter, beating analysts' projections as people spread out over thousands of towns and cities and stayed for weeks and months with workers no longer having to be in traditional offices five days a week.
"The benefits seen over the past year or so are expected to continue, especially as traveling increases with the pandemic hopefully continuing to wane," said Scott Kessler, an analyst at Third Bridge.
Airbnb's stock performance also has given it the title of best performer of any IPO to raise $1 billion or more since its debut, according Bloomberg data. This comes at a time where weak trading in recent IPOs has weighed on the listings pipeline. At $105 billion in market value, it's now the biggest online travel company, eclipsing Booking Holdings Inc., Expedia Group Inc. and Marriott International Inc.
Some caution is warranted. Its stock rally has surpassed its peers by a mile in the travel industry since it went public, which could mean its upside is minimal. Booking has climbed 5.5%, Marriott is 29% higher and Expedia is up 44% in that time period.
And it isn't cheap. Airbnb sells for about 12 times its estimated sales. That's well above its peers with Booking sitting at 5.3, and both Expedia's and TripAdvisor's are below 3.
To be sure, shares of Airbnb more than doubled in value in its blockbuster debut and seen a more moderate growth rate since. The company has, however, fared better than other growth stocks as the market navigated through multiple tech sell-offs.
Subrat Patnaik and Ryan Vlastelica report for Bloomberg News.
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllBig Law Assembles as Cruise Lines Clinch Partial Victory in $439M Havana Docks Suit
Marriott's $52M Data Breach Settlement Points to Emerging Trend
Employee's Alleged Action Lands Marriott in Court for Defamation, Negligence
Trending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250