Airbnb ABNB
What does Airbnb do?
Airbnb operates a global online marketplace that brings hosts and guests together. Through its website and app, private accommodations, experiences and other services can be booked. The company generally does not own real estate itself but acts as an intermediary, providing technology, payment processing, review systems and customer service. Gift cards are also part of the offering.
Airbnb earns revenue mainly through service fees charged to both guests and hosts on successful bookings. Additional income comes from experiences and supplementary services. In competition, the company faces online travel platforms and traditional hotel chains as well as other vacation rental providers. Its strengths lie in a well-known brand, a broad and diverse selection, and the network effect between hosts and guests. A high share of direct and unpaid traffic tends to reduce dependence on advertising spending with search engines.
Score profile
Rank vs. Travel Services (9 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, Airbnb ranks above average in the group Travel Services (7.2/10). On growth, the company ranks among the best in the group Travel Services (9.4/10). On valuation (higher = cheaper), the stock ranks in the bottom fifth in the group Travel Services (1.1/10). On financial strength, Airbnb ranks above average in the group Travel Services (6.1/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 29.6x | 13.0x | better than 17 % |
| Trailing P/E | 35.1x | 18.7x | better than 6 % |
| PEG ratio | 1.6x | 1.0x | better than 17 % |
| EV/EBITDA | 32.3x | 12.9x | better than 6 % |
| Price/sales | 8.0x | 1.9x | better than 6 % |
| Price/book | 11.8x | 2.9x | better than 21 % |
| Revenue growth | 18.9% | 4.4% | better than 94 % |
| Earnings growth | 42.7% | 12.4% | better than 94 % |
| Gross margin | 83.1% | 64.2% | better than 61 % |
| Operating margin | 41.5% | 27.8% | better than 83 % |
| Net margin | 23.0% | 11.4% | better than 72 % |
| Return on equity | 35.8% | 24.0% | better than 72 % |
| Debt/equity | 27.0% | 177.1% | better than 61 % |
| Current ratio | 1.7x | 1.1x | better than 72 % |
| Free cash flow yield | 2.9% | 2.9% | better than 50 % |
| Dividend yield | 0.0% | 1.8% | – |
| Payout ratio | 0.0% | 19.8% | – |
| Beta | 1.27 | 1.39 | – |
Valuation: what is Airbnb worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give Airbnb a model range of 81.99 USD to 202.64 USD per share.
40 analysts, average rating “Buy”, average price target 202.80 USD (+8.5%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- The number of booked nights and experiences largely determines the transaction volume on which fees are charged.
- The average price per night and the fee structure influence how much revenue is generated per booking.
- A growing supply of hosts and a strong brand foster network effects and keep customer acquisition costs limited.
Risks
- Regulation of short-term rentals, such as registration requirements, overnight limits or bans in individual cities, can significantly restrict supply.
- Travel spending is sensitive to the economy, crises, pandemics and geopolitical events, which makes demand fluctuate.
- Intense competition from hotels and online travel platforms as well as liability and safety issues can weigh on reputation and margins.
What to look for with Airbnb
Gross booking value is particularly informative because, as the basis for fees, it reflects demand on the platform earlier and more directly than revenue.