Airbnb Q4 earnings preview: Can the momentum continue?
Matt Weller, CFA, CMT February 23, 2021 2:02 AM
Airbnb faces its biggest hurdle yet: The first earnings report as a publicly-traded company.
Embodying the market’s rapid-growth-at-any-cost zeitgeist, lodging website AirBNB (ABNB) has seen its stock roughly triple to $200 from December’s $68 IPO price. While the stock technically opened for trading closer to $145, ABNB has been a standout performer over the last couple months regardless of how you look at it. Now, the firm faces its biggest hurdle yet: The first earnings report as a publicly-traded company.
Thursday 25 February after the closing bell
-$8.41 in earnings per share on $739M in revenues
What to watch from Airbnb earnings
Though ABNB saw its gross booking value (GBV) decline by nearly -40% in the first three quarters of 2020, traders continue to show optimism over the company’s long-term growth potential in a post-pandemic world.
That said, the company has already warned that the virus will weigh on its Q4 results, stating in December that "[d]uring the fourth quarter of 2020, another wave of COVID-19 infections emerged. As a result, countries imposed strict lockdowns, in particular in Europe. Similar to the impact of the initial COVID-19 wave in March 2020, we are seeing a decrease in bookings in the most affected regions. As a result, we expect significantly greater year-over-year decline in Nights and Experiences Booked and GBV in the fourth quarter of 2020 than in the third quarter of 2020 and greater year-over-year increases in cancellations and alterations in the fourth quarter of 2020 than in the third quarter of 2020."
Despite this warning, some analysts have argued that Airbnb may be better positioned to navigate the pandemic than many traditional hotel and lodging chains. After all, if you’re going to travel during a pandemic, it may be more appealing to stay in an entirely private home rather than a (relatively) crowded hotel with many of its amenities shut down anyway. While this narrative is compelling, it’s worth noting that ABNB is already sporting a market capitalization of $120B, substantially more than rivals Marriot International (MAR, $47B), Hilton Worldwide (HLT, $34B), and Hyatt Hotels (H, $9B) combined. In other words, traders will need to see a clear vision for the Airbnb to keep growing its market share of the global travel industry to maintain their confidence in the stock.
Airbnb technical analysis
Technical analysis on a two-month old stock is always going to be less reliable, but it is encouraging to see that ABNB has been in a clear uptrend since going public in December. For the past month, the stock has been finding support at the bottom its rising channel and the 100-hour EMA. With prices currently testing that area as we go to press, there’s potential for a rally toward the center line of the channel in the mid-$200s if Thursday’s release beats expectations. On the other hand, a disappointing earnings report could break the channel and see ABNB drop toward the mid-$100s as investors call the company’s long-term growth prospects into question:
Source: TradingView, GAIN Capital
Learn more about equity trading opportunities.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.