Do Analysts Care About Airbnb (ABNB)’s Elevated Valuation?

Airbnb may be overvalued with poor growth indicators, but the 32 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $98.0 to $165.0 per share, for an average of $138.16. At today's price of $118.485, Airbnb is trading -14.2% away from its average target price, suggesting there is an analyst consensus of some upside potential.

Airbnb, Inc., together with its subsidiaries, operates a platform that enables hosts to offer stays and experiences to guests worldwide. Based in San Francisco, CA, the large-cap Consumer Discretionary company has 6,811 full time employees. Airbnb has not offered a dividend during the last year.

Airbnb has a trailing twelve month P/E ratio of 43, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of 3.97, the company has a forward P/E ratio of 30. Based on the average annual growth rate of Airbnb's historical and projected earnings per share, which is -106.5%, the company's PEG ratio is -0.4. This indicates that its shares are overvalued.

Furthermore, Airbnb is likely overvalued compared to its book value, since its P/B ratio of 13.4458685 is higher than the sector average of 3.12.

If analysts are giving the the company a decent rating despite its hefty price point, it could be related to its growing revenues, falling debt levesls, and strong cash flows. You can see for yourself in the financial summary table below:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $4,805 $3,378 $5,992 $8,399
Revenue Growth n/a -29.7% 77.37% 40.18%
Gross Margins 75.1% 74.07% 80.71% 82.15%
Gross Margins Growth n/a -1.37% 8.96% 1.78%
Operating Margins -10.44% -101.79% 9.05% 22.51%
Operating Margins Growth n/a -875.0% 108.89% 148.73%
Net Margins -14.03% -135.71% -5.88% 22.54%
Net Margins Growth n/a -867.28% 95.67% 483.33%
Earnings Per Share -$1.29 -$16.12 -$0.57 $2.76
EPS Growth n/a -1149.61% 96.46% 584.21%
Diluted Shares (MM) 522 284 616 409
Free Cash Flow (MM) $97 -$667 $2,164 $3,405
FCF Growth n/a -785.79% 424.44% 57.32%
Capital Expenditures (MM) -$125 -$37 -$25 -$25
Net Debt / EBITDA nan 0.85 -10.35 -2.44
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.