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Airbnb: Obliterates Earnings With A Major Growth Runway Ahead

Aug. 03, 2022 7:31 AM ETAirbnb, Inc. (ABNB)3 Comments
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Deep Tech Insights


  • Airbnb is a leading travel accommodation provider which provides unique stays from all over the world.
  • The company has recently beaten earnings expectations and is gaining great feedback on new product features.
  • ABNB has a fortress Balance Sheet with nearly $10 billion in cash and management has approved $2 billion in share repurchases.

"Cheers!" Caucasian Couple Sharing a Celebratory Toast with Local Wine, Chips, and Salsa Together in a Xeriscaped Yard with a Cute Modern Xeriscaped Tiny Home in the Background

Jeremy Poland

Airbnb (NASDAQ:ABNB) is a leading travel accommodation provider, which is disrupting the traditional Hotel Industry. A couple of months back I wrote a post on Airbnb and recommended the stock as a "Buy" based on their valuation and

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Senior Investment Analyst for Hedge Funds. Interviewed Hedge Fund Managers and CEO's. Investment Strategy: Focus on Deep Dive Valuation, G.A.R.P (Growth at a Reasonable Price). Masters in Equity Valuation, 755+ Companies Analysed.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (3)

Frank Thomas in Florida profile picture
Airbnb reported some fantastic results. China seems to be offline for now but China will come back online when covid subsides. However, Chinese residents can and do travel to other countries; just not within China. $2 bill share buyback is great news. The only negative I can see is share dilution. On 6/30/21, o/s shares were 611.74 mill. On 6/30/22, share count jumped to 683.54 mill. Airbnb needs to temper shares being issued or will seriously dilute shareholder value
Booban profile picture
@Frank Thomas in Florida Whats the explanation for share dilution? They have tons of cash. Are employees simply selling their shares after lockup?
Matt051 profile picture
@Frank Thomas in Florida @Ben Alaimo I also noticed that.They said "The share repurchase program will enable us to offset dilution from our employee stock programs. Stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy "

If I get it right newly issued shares due to stock based compensation are up 11%, share buyback program of $2 billion only covers 25% of newly issued shares and if it continues like this share value needs to grow at least 8-9% per year just to cover stock dilution? If we add average inflation of 4% for next few years if Airbnb share doesn't go up 13% every year, then in real terms shareholder has 0 real gain. Or I'm missing something?
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