Airbnb Q4 preview: Where next for Airbnb stock?

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Josh Warner
By :  ,  Market Analyst

When will Airbnb release Q4 earnings?

Airbnb will publish fourth quarter earnings after the markets close on Tuesday February 15.


Airbnb Q4 earnings preview

Airbnb posted its best-ever quarter back in November, delivering record revenue and earnings and confirming it is firmly on course to put the struggles of the pandemic behind it.

Wall Street expects revenue to rise 70% to $1.46 billion in the fourth quarter from $859.3 million the year before, when Covid restrictions were stricter. Importantly, this will be the last quarter to be flattered by weak comparatives stemming from the pandemic.

The strong growth is on expectations that there will be a 29% jump in the number of nights and experiences booked compared to last year and a faster 49% increase in gross booking value, driven by higher prices as demand rebounds. Airbnb is hoping the number of bookings made in the fourth quarter will be broadly level with pre-pandemic levels.

The company is not only benefiting from the recovery in travel, but also the shift to remote and hybrid working that has allowed people to be more flexible about where they spend their time. Long-stays of over 28 days have been the fastest growing segment compared to pre-pandemic levels.

The key question will be how the Omicron variant weighed on demand during the quarter, and what sort of impact it has had in the new year. Analysts are generally bullish and believe Airbnb can prove more resilient than rivals such as traditional hotels because it provides the ability for guests to check in and out without any human contact. Still, demand for top city centre locations has still not recovered to pre-pandemic levels and this is one of the most lucrative areas for the business, with people still preferring non-urban locations for now. Investors will want to see signs this can provide a catalyst in 2022.

Adjusted Ebitda is forecast to come in at $283.6 million, marking the third consecutive quarter of positive earnings and swinging from the $20.5 million loss booked the year before. However, that will be significantly lower than the record $1.1 billion reported in the third quarter. Net income at the bottom-line is expected to more than double year-on-year to $83.1 million, but again this will be down markedly from the bumper profits seen in the last quarter. The anticipated sequential slowdown in earnings growth is partly explained by the fact the third quarter covers the busy holiday summer season, whilst the fourth is relatively quiet as it is during the winter.

Airbnb said its single biggest priority in 2021 was to prepare itself for the recovery in travel in 2022, with the outlook for this summer looking far brighter than it did a few months ago. This has seen Airbnb recruiting more hosts, launching its first large-scale marketing campaign in over five years, simplifying its app and improving customer service.

The outlook for 2022 will therefore be pivotal in deciding how markets react to the earnings. If Airbnb meets expectations in the final quarter, then it is on course to report annual revenue growth of over 75% and deliver of $1.5 billion of adjusted Ebitda compared to the $250.7 million loss seen when the pandemic hit hardest in 2020. But, without weak comparatives to flatter the results, analysts expect Airbnb’s growth to slow this year, pencilling in 24% revenue growth to $7.3 billion and 21% growth in adjusted Ebitda to $1.8 billion in 2022.


Where next for ABNB stock?

Airbnb went public in late 2020 and shares have gone through several periods of extreme volatility, having hit as high as $220 and as low as $128 since listing at an IPO price of $68.

Sellers managed to push shares to a six-month low of $134 in late January before enticing buyers back into the market, causing the stock to have trended higher over the past two weeks. The stock surpassed the brief $172 ceiling seen last month. If the uptrend can keep up momentum, supported by the fact the stock has recently broken above both moving averages and the bullish RSI, then it needs to recapture the December-high of $187.50. A break above here would be more significant as it opens the door to the $210 ceiling hit on several occasions in November.

On the flip side, the 50-day sma has traded below the 100-day sma for the last seven weeks and trading volumes have declined to suggest the uptrend is losing steam, with the 10-day average of 5 million shares slipping from the 20-day average of 5.7 million. Sellers have regained control since the stock hit a two-month high of $177 this week. Any reversal is likely to send the stock back down to the 100-day sma at $163 before the 50-day sma at $157 comes into view. Below there opens the door to the sub-$150 levels seen earlier this month.

Airbnb shares rise as rebound in travel stocks continues 


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