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Airbnb take rate upside offset by underlying slowdown - Jefferies

Published Nov 29, 2023 22:16
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Jefferies analysts downgraded shares of Airbnb (ABNB) to Hold from Buy in a note Wednesday, lowering the stock price target to $140 from $155 per share.

The analysts said the firm has lowered the stock's rating as the take rate upside is offset by an underlying slowdown.

"A recent slowdown in Bookings increases risk of downside to consensus, making the story more reliant on potential take rate expansion," the analysts explained. "ABNB's 4Q23 Bookings outlook implies growth decelerates to 10-13% y/y (vs. 14% in 3Q, ex-F/X), driven by a 'few points' of moderation in Nights (vs. 13.5% in 3Q). This implies Nights would need to accelerate in CY24 to hit cons of 12.5%, despite moderating tailwinds from the pandemic recovery."

In addition, Jefferies' deep dive suggests the monetization opportunity is largely priced in, underscored by ABNB's 65% valuation premium to Internet stocks despite in-line EBITDA growth.

"Our deep dive shows ABNB could deliver 400 bps of take rate upside through CY30 (vs. CY23), driven by 255 bps from sponsored listings, 85 bps from guest/host services, and 60 bps from travel insurance (incremental to existing contribution," the analysts added.

The analysts explained: "Valuation appears to price in take rate upside, with ABNB's 16.5x '25 EV/EBITDA representing a 65% premium to platform Internet despite offering in-line EBITDA growth (13% '23-'25 CAGR). We estimate expanding take rate by 400 bps would contribute an incremental ~$7.7B/$3.8B to ABNB's CY30E Rev/EBITDA (assumes 50% reinvestment rate at 6x ROI), representing ~35%/45% upside to CY30E cons."

Airbnb take rate upside offset by underlying slowdown - Jefferies
 

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