Airbnb Shares Jump On Firm Quarterly Results Expansion Plans

Airbnb's shares surged 13.3 per cent in premarket trade, surpassing Wall Street's Q4 expectations. Strong international travel demand, notably from Asia and Latin America, drove Airbnb's share surge. Nights booked by Chinese tourists increased by 25 per cent, and Airbnb plans further expansion, aiming to launch new businesses annually. Analysts foresee significant growth potential over the coming years.

Airbnb shares rose as much as 13.3 per cent in premarket trade on Friday after the vacation home rentals company beat Wall Street estimates for fourth-quarter results, boosted by strong international travel demand. Travel companies have been helped by healthy demand in Asia, especially from Chinese consumers visiting destinations in Southeast Asia. Airbnb said that nights booked by outbound Chinese tourists rose 25 per cent in the fourth quarter. It also saw a 30 per cent growth in nights booked for domestic travel in Latin America, led by Brazil, compared to last year. First-time bookers in the region grew by nearly 15 per cent sequentially.

The short-term rentals platform said growth in expansion markets was twice that of their core markets. "This instils confidence in our forecast for international markets to add tens of billions in bookings over the next several years," said Morningstar analyst Dan Wasiolek. Airbnb also said it plans to invest $200 million to $250 million towards a new travel-related business which would be launched in May. CEO Brian Chesky said the company expects to launch one or two firms yearly on the post-earnings conference call for the next five years. "Each business could take three to five years to scale. A great business could get to a billion dollars for revenue," he added.

William Blair analyst Ralph Schackart 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." Shares of Airbnb trade at about 32.06 times their forward profit estimates compared to an industry median of 17.99 times.

#airbnb #share #stockmarket #wallstreet #travelnews #travelupdate #airbnbupdate