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Airbnb: 4 Catalysts That Will Drive Growth For Years

Apr. 01, 2021 10:16 AM ETAirbnb, Inc. (ABNB) Stock10 Comments
Wealth Insights profile picture
Wealth Insights


  • Airbnb went public at the end of 2020, one of the larger companies to go public with a market cap already above $100B.
  • Many investors argue that the stock is prohibitively expensive.
  • There are multiple catalysts that will drive growth over the coming years, and patient investors will see a strong company burn off the premium valuation.

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Destination and experience platform Airbnb (NASDAQ:ABNB) went public in December, and the stock has been a success with a $100B+ market cap, and shares trading up from IPO day levels. While the stock may

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Wealth Insights profile picture
Using fundamental analysis and common sense, I provide straightforward insights on stocks and markets. https://www.threads.net/@wealth__insight- Bachelor's degree in Business Administration with a concentration in Financial Analysis. Been investing and following the markets for more than a decade.- Wealth Insights is an investor and investment author. His content is not geared to anyone's investment goals, time horizons, or risk tolerance. Content is for illustrative purposes only and is not intended to displace advice from a fee-based financial adviser. It is not to be taken as investment advice or influence investor decision-making. The accuracy of data is not guaranteed.

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Comments (10)

gonecoastal profile picture
I'm an AirBNB superhost as are a number of friends in my Northern CA neighborhood. COVID killed all business, HOWEVER now it's beginning to pick up - and not short term. Longer terms are becoming more common ( meaning more than 4 days). This matters because the type of visitor is changing - no longer someone coming to interview or do a few days of work, more of them are coming for a full week or more of work. The other thing to note, is that many folks I know that just rented out a room, are now out ( for now at least). Both they didn't want to have the potential exposure, nor did their typical visitors. So what I've been noticing is that supply is dropping. Only those places with separate units, separate entrances that can be keep apart from the main home, or full houses/ apartments are whats renting now. The prices on these will rise as a result. And Air BnB is pushing hosts to clean methodically and leave time between visitors to guarantee that the room is ventilated before a new visit. Bottom line is that this business is coming back slowly but the interest is high. The real driver in most cities will be how fast universities and businesses come back - visitors will follow. Hope this gives some insight.
"I've seen a lot of folks talk about "waiting for a dip" in Airbnb to meaningfully build a position. The problem with that is that quality businesses tend to stay expensive over time." Fully agree, this limits the risk or the stock. Investors "waiting" are making a mistake.

"the disruption due to Covid is masking the growth and strong fundamentals that are "under the hood" of Airbnb." Fully agree, without covid, airbnbs revenue would have been 6.5-7b this year. But given the changes to airbnb covid has induced, the revenue could potentially be much higher than that sooner, rather than later.
Since I'm over here in the Old World 1/2 the year, it doesn't matter whether I see Americans rotating through, or if it locals (I'm in the Benelux/Germany corridor, when people travel here, the first word out of their mouths is "we booked it with ABNB."

I have heard this hundreds of times over the past few years. My own family (nuclear and extended), when they come/visit, despite me living here on and off for so many years, they come and say things like "oh, we got a great deal on the F Riveria, or N. Italy, or the Baltcis, or whatever...and we booked it using AirBNB."

I'm sorry, I may be an old fart, but you don't have to hit me over the head numerous times. The TAM and runway for ABNB is monstrous, plain and simple. Even people who've moved back to the States use ABNB for finding temporary dwellings, while they use Z repeatedly to shop for homes to buy.

To me, focusing solely on ABNB, the question won't be if ABNB succeeds over the years/decades, the question is how ingrained into society and thus how big they become. So it will be all about management....they don't screw up, then I am looking at another GOOG-like returns over the next 20 years.

Taking a slice of something, while providing increased ease in providing people with that very "something", that will only grow exponentially over the decades...it's a fantastic business to be in.

So, I am long ABNB from $150. My wife thought I was a lunatic ponying up over $100 for Google stock the day after its IPO in 2004. Back then, she told me, and i quote as I remember clearly, that I had gone "off the deep end into the certifiable swamp of investing lunacy" (trust me, haha, it's damn hard to find a good woman like this).

For ABNB....I am happily long now....and I would love to buy more at $100, $80, $50, or $30 if there was ever any external market goofed craziness (maybe aliens landing on Earth?) to get the common down into those ranges. But even if aliens did land, they'd probably use ABNB to book rooms---either to sleep or, most likely, to dissemble us one human at a time.

After all, we all are walking, talking, breathing stores of carbon....hard to find in this big universe of ours and thus valuable as all get out ;-0

The best of fortune to us all
ChrisForte profile picture
@D. Rider Great comment! Totally enjoyed it. Very well said. I like your comparison to a younger version of Google.

There are plenty of haters of ABNB whether it's because of it's valuation, their operational growing pains, or because they had some petty grievance over their pillow cases during a single stay, but I think this is an unstoppable freight train that, like Google, will be much bigger and better as the years go on,. It will reward long term investors that can see the big picture.

Oh, and there is about to be a travel BOOM unfolding over the next 12 months the likes we've never seen before, complete with travel by planes, trains, and automobiles, ships too, with plenty of "revenge spending." And all these travelers need a place to stay.
96% of 2019 travelers did not use airbnb, prices are increasing, there will be/is a supply problem in many places -> number of hosts will increase dramatically.
After realizing how much prices have increased for the coming vacations, I again increased my airbnb position. There will be a very nice supply problem in many places in the world.
Frank Thomas in Florida profile picture
Airbnb has to do better job of screening hosts. I've had some really bad Airbnb stays; to include dirty linens not changed between guests; smoke alarms chirping; smelly conditions; cockroaches; etc... Reviews are semi-worthless because most of us, including me, always leave good reviews. Can Airbnb have inspectors go undercover and check on hosts? Or how to bring up quality of stays? If Airbnb ignores quality, Airbnb will not become profitable.
@Frank Thomas in Florida I am on the other side of the "experience", with a handful of properties that I sometimes rent out through AirBnB. I fully agree that there is alot of room for improvement in matching renter and host expectations. Their software is, to put it kindly, primitive. I have no idea what all those engineers are doing that you mention below.
Bnuts Alpha profile picture
@Frank Thomas in Florida I'd say the onus is on you to leave more accurate and truthful reviews. You spent the money on the place so why wouldn't you let the host and others know if the experience was sub par?
Frank Thomas in Florida profile picture
This article is focused on revenue. The focus should be on profits. Here's what I think Airbnb needs to address in order to make money for its shareholders: Airbnb had 1,480 engineers as of 12/31/20. That's just one department of the company... engineering. Altogether, Airbnb had 5,597 employees as of 12/31/20. Even more amazing, in May '20, Airbnb laid off 1,800 employees. Anyone thinking Airbnb was similar to Craigslist, where a few employees maintain online posting boards, you're wrong. After laying off 1,800 people, Airbnb still had 5,597 employees as of 12/31/20. Just like Groupon, too many employees to act as a low-cost middleman. Let's put the emphasis on streamlining operations and stop relying on raising debt and issuing more shares.
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