- Ticker ABNB
- Market debut on Dec 10th (Nasdaq)
- Raised the price from $44-$50 to $56-$60
- Selling $3.1B stock
- Market valuation $42B
- 5.6m listings in 100,000 cities
- Half of the revenue is outside USA
- Millennials are the bulk of its business
- Average is $130 per night
- Risk1: pandemic and risk averse travelers
- Risk 2: competes against online travel operators and lodging leaders.
- Risk 3: $2B loan at steep 10% rate
- Risk 4: Tension with local authorities n governments for taxes and issues in residential neighborhoods
- Profitable; $219M in Q3
- But $576M loss in Q2.
Airbnb was valued $18B in April 2020 during private funding and $31B during 2017.
(Doordash was valued at $16B in June vs. $37B during IPO)
Projections: expected revenue $3.3 billion this year, down 31% from 2019, but rise 30% in 2021 and another 40% to $6 billion in 2022.
Valuation: 7X 2021 sales of $4.3B and 10X+ current sales. ABNB valuation is much higher than Marriott and Hilton. MAR and HOT are 3X-4X 2021 sales.
Bottomline: ABNB share is not cheap based on financial fundamentals (earnings and sales)! You have to have an outlook for 2021 and 2022 or beyond when travel normalizes.
Price Targets: Based on a model for 2023, 40 cents profit leads to $1B earnings that equals $75 price target per share.
Another model from a marketing professor in NY, ABNB will be $100B by end of 2022 implying $150 share price. 15X forward sales…
Doordash vs Airbnb IPO?
Airbnb is a reverse play. Due to reopening, it should see a surge in demand when consumer and business travel begins to revive post-pandemic. DoorDash, by contrast, has been a Covid winner (just like Zoom).
Additional disclosure: Disclaimer: The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock. The author is not a financial advisor. Please always do further research and do your own due diligence before making any investments. Every effort has been made to present the data/information accurately; however, the author does not claim 100% accuracy. The stock portfolios presented here are model portfolios for demonstration purposes.
