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Airbnb Weaker As Results Show Recovery Eluding Two Key Segments Still

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By Dhirendra Tripathi

Investing.com – Airbnb (NASDAQ:ABNB) shares were down 1% in Friday’s premarket as its March quarter performance showed that recovery in two key segments of the company’s business, urban travel and cross-border travel, is still elusive.

Also weighing was the fact that the company’s net loss more than tripled to $1.17 billion from $341 million in March quarter of 2020.

The two are the strongest segments for the company historically and, a blow-out quarter notwithstanding, their slow recovery weighed on the sentiment. It prompted a few brokerages to lower their targets for the stock - although some raised theirs, too.

The company said it expects its June quarter revenue to be significantly higher than that of the same quarter last year but at a level similar to that of 2019 for the three-month period. It said its ‘nights and experiences’ segment continues to face volatility.

Barclays (NYSE:BCS) analyst Ross Sandler lowered the price target on Airbnb to $140 from $180 while maintaining an ‘equalweight’. The stock closed at $135.75 Thursday.

Mizuho (NYSE:MFG) Securities analyst James Lee lowered the target to $165 from $176 while maintaining a ‘neutral’.

Credit Suisse (NYSE:CS) raised it by $2 to $164. Stifel raised its target to $145 from $140.

Airbnb’s March quarter revenue increased by 5% year-over-year to $887 million, exceeding levels seen in the same quarter of 2019, the time when the world didn’t know about Covid-19. However, analysts worry that the company is less well placed to respond to the rebound in tourism travel this year than many of its rivals. While there are thousands of hotel rooms ready to receive guests as they start to book vacations again, Airbnb's supply depends on the behavior of hosts, who have been reluctant to relist their properties after expensive cancellations due to lockdowns last year.

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