On Thursday, TD Cowen maintained a positive outlook on Airbnb Inc. (NASDAQ:ABNB) shares, despite reducing the stock price target from $180 to $170. The firm's analyst highlighted that Airbnb's first-quarter nights booked increased by 9.5%, meeting expectations as growth in the United States and Europe slowed down.
Moreover, the average daily rates (ADRs) rose by 2% excluding foreign exchange impacts, outperforming due to a favorable mix of bookings.
The company's revenue and EBITDA for the quarter exceeded projections, although second-quarter estimates for growth did not meet expectations for acceleration. The anticipated EBITDA for the upcoming quarter appears to be affected by comparisons to previous periods, increased advertising costs, and a conservative outlook.
Still, it was noted that the margins for the first half of the year are improving year-over-year and are on track to surpass the full-year guidance, with an estimate of flat year-over-year at 37%.
TD Cowen also provided insights into Airbnb's product roadmap and adjusted the free cash flow (FCF) estimate for the year 2025 downwards by 3.5% to $5.76, factoring in foreign exchange fluctuations and model adjustments. The new price target of $170 is based on a 30 times multiple of the company's free cash flow.
The analyst's commentary underscores a belief in Airbnb's continued performance and strategic planning, despite the adjustments made to financial projections and the price target. The maintained Buy rating indicates confidence in the company's long-term potential.
InvestingPro Insights
As Airbnb (NASDAQ:ABNB) navigates the dynamics of post-pandemic travel and changing consumer preferences, real-time data from InvestingPro provides an insightful snapshot of the company's financial health and market valuation.
An InvestingPro Tip highlights Airbnb's impressive gross profit margins, which have been reflected in the company's recent revenue and EBITDA performance surpassing projections. This aligns with the analyst's observations on Airbnb's ability to outperform with a favorable mix of bookings and improved margins.
InvestingPro Data shows Airbnb's market capitalization stands at a robust 93.78 billion USD, with a Price/Earnings (P/E) Ratio of 19.76, indicating investor confidence in the company's earnings potential.
The company's Price/Book ratio for the last twelve months as of Q1 2024 is at 11.92, suggesting a premium valuation compared to its book value. The revenue growth of 17.6% for the same period demonstrates Airbnb's ability to expand its top-line figures efficiently.
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