One-glance verdict
Undervalued
$386.25 our estimate vs market $154.34
Wall Street consensus: $184.35 (-52.3% lower than our fair-value estimate)
60% below our estimate, below the bear case
Fundamentals snapshot
Airbnb, Inc.
ABNB · NMS · Consumer Cyclical · Travel Services
Current price
$154.34
52-week range
$110.81 - $193.45
Market cap
$92.42B
Balance sheet
Healthy
30.65x Strong cushion
Net cash $9.57B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 7.5% last year.
- Reward Returns 34.5% on equity, ahead of 33% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Operating margin compressed from 22.5% to 21.0% over 3 years.
What this company does
Airbnb, Inc.
Airbnb is a platform where people can rent out their homes and offer local experiences to travelers around the world. The company earns its revenue (the money it makes from sales) by charging a fee on every booking, so its performance is closely linked to global travel trends.
How the company got here
Airbnb started in 2007 when two roommates in San Francisco, Brian Chesky and Joe Gebbia, couldn't afford their rent. They decided to turn their living room into a makeshift bed and breakfast by offering air mattresses to attendees of a local design conference, as all the hotels were booked. The idea was a success, and they were soon joined by a third co-founder, Nathan Blecharczyk, to build a website. After facing early struggles, including famously selling novelty cereal boxes to raise money, the company was accepted into a startup incubator which provided crucial funding and mentorship. The company officially shortened its name from AirBed & Breakfast to Airbnb in 2009 and expanded from just rooms to entire homes and apartments, eventually becoming a publicly traded company in 2020.
What it actually does
Airbnb operates an online marketplace that connects people with a place to stay (hosts) with people looking for lodging (guests). The company doesn't own the properties listed on its platform; it acts as a broker, earning a fee from each booking. Travelers can find a wide variety of places to stay, from a single room in someone's home to entire houses, apartments, and even unique accommodations like castles or treehouses. Beyond just a place to sleep, Airbnb also allows local experts to offer unique activities and tours to travelers, known as 'Experiences'.
Stays
This is Airbnb's core business and makes up the vast majority of its revenue. When a guest books a stay, Airbnb charges a service fee to both the guest and the host. The host's fee is typically around 3%, while the guest's fee can be higher. This system allows property owners to earn money from their extra space while providing travelers with a wide range of lodging options.
Experiences
This is a smaller but growing part of Airbnb's business where local experts offer unique activities to travelers. These can range from cooking classes and guided tours to workshops and other cultural events. For each booking of an Experience, Airbnb charges a commission (a percentage of the price) to the host, which is typically around 20%. This allows travelers to have more authentic, local experiences during their trips.
What management is betting on now
Airbnb's leadership is focused on several key areas for future growth. A major priority is to make hosting more mainstream by simplifying the process for new hosts and expanding the types of properties available, including more affordable rooms. They are also working to expand internationally into markets where they have less of a presence, particularly in Asia and Latin America. Additionally, the company is expanding beyond its core business by adding new services like car rentals and curated local services, and even incorporating boutique hotels onto its platform to attract a wider range of travelers.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$3.61B
Net income
$816.00M
Diluted EPS
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Operating cash flow
$1.27B
Free cash flow
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Sources
Revenue
$2.68B
Net income
$160.00M
Diluted EPS
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Operating cash flow
$1.71B
Free cash flow
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Revenue
$2.78B
Net income
$341.00M
Diluted EPS
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Operating cash flow
$526.00M
Free cash flow
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Revenue
$4.09B
Net income
$1.37B
Diluted EPS
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Operating cash flow
$1.36B
Free cash flow
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Revenue
$3.10B
Net income
$642.00M
Diluted EPS
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Operating cash flow
$975.00M
Free cash flow
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Revenue
$2.27B
Net income
$154.00M
Diluted EPS
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Operating cash flow
$1.79B
Free cash flow
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Revenue
$2.48B
Net income
$461.00M
Diluted EPS
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Operating cash flow
$466.00M
Free cash flow
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Revenue
$3.73B
Net income
$1.37B
Diluted EPS
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Operating cash flow
$1.08B
Free cash flow
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Is it cheap or expensive?
Fair value $386.25 vs current price $154.34
Wall Street consensus is the average analyst price target: $184.35 (-52.3% lower than our fair-value estimate).
Our most-likely fair value is $386.25 a share — about 150.3% above today's price of $154.34, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $9.6B - more cash than debt. Interest coverage 30.7x.
Net debt
$-9.57B
Interest coverage
30.65x
Airbnb, Inc.'s profit covers its interest bill about 30.7 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
ABNB
BASELINE
Airbnb, Inc.
Total debt $2.50B Interest coverage 30.65x This is the baseline the peer rows are being compared against.
Total debt $20.92B Interest coverage 5.74x -81% vs ABNB Carries about 5.3x less debt cushion than ABNB.
Total debt $5.69B Interest coverage 7.23x -76% vs ABNB Carries about 4.2x less debt cushion than ABNB.
Total debt $17.77B Interest coverage 5.12x -83% vs ABNB Carries about 6.0x less debt cushion than ABNB.
Total debt $14.02B Interest coverage 4.34x -86% vs ABNB Carries about 7.1x less debt cushion than ABNB.
Total debt $4.02B Interest coverage 20.16x -34% vs ABNB Carries about 1.5x less debt cushion than ABNB.
What you should know
The case for and against ABNB
3 Rewards
1 Risk
Rewards
-
Revenue grew 7.5% last year.
-
Returns 34.5% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Operating margin compressed from 22.5% to 21.0% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
35.16x
Forward P/E
24.95x
P/B
11.68x
P/S
7.02x
EV/EBITDA
31.09x
PEG ratio
1.54x
Profitability
How much profit each dollar creates
Gross margin
82.9%
Operating margin
21.0%
Net margin
20.4%
ROE
34.5%
ROA
6.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.32x
Current ratio
1.41x
Quick ratio
0.68x
Total debt
$2.50B
Total cash
$12.07B
Growth
How the business has been compounding
Revenue TTM
$13.16B
Revenue 5Y CAGR
19.6%
EPS TTM
4.39
EPS 5Y CAGR
-28.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$4.86B
Free CF TTM
$4.65B
FCF margin
35.3%
Dividend
Shareholder payout
Yield
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Payout ratio
0.0%
Last ex-div date
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