It's been a great afternoon session for Airbnb investors, who saw their shares rise 7.9% to a price of $143.2 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
Airbnb's P/B and P/E Ratios Are Higher Than Average:
Airbnb, Inc., together with its subsidiaries, operates a platform that enables hosts to offer stays and experiences to guests worldwide. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 22.33 and an average price to book (P/B) ratio of 3.12. In contrast, Airbnb has a trailing 12 month P/E ratio of 41.4 and a P/B ratio of 17.86.
Airbnb's PEG ratio is 1.58, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company Has a Positive Net Current Asset Value:
| 2021-02-05 | 2022-02-25 | 2023-02-17 | |
|---|---|---|---|
| Revenue (MM) | $3,378 | $5,992 | $8,399 |
| Gross Margins | 74.0% | 81.0% | 82.0% |
| Operating Margins | -102% | 9% | 23% |
| Net Margins | -136.0% | -6.0% | 23.0% |
| Net Income (MM) | -$4,585 | -$352 | $1,893 |
| Net Interest Expense (MM) | -$145 | -$425 | $162 |
| Depreciation & Amort. (MM) | -$126 | -$138 | -$81 |
| Earnings Per Share | -$17.39 | -$0.52 | $3.07 |
| EPS Growth | n/a | 97.01% | 690.38% |
| Diluted Shares (MM) | 264 | 682 | 616 |
| Free Cash Flow (MM) | -$703 | $2,338 | $3,455 |
| Capital Expenditures (MM) | -$37 | -$25 | -$25 |
| Net Current Assets (MM) | $1,327 | $3,453 | $4,383 |
| Long Term Debt (MM) | $1,816 | $1,983 | $1,987 |
| LT Debt to Equity | 0.63 | 0.42 | 0.36 |
Airbnb has healthy debt levels, wider gross margins than its peer group, and positive EPS growth. However, the firm has consistently negative margins with a positive growth rate. Finally, we note that Airbnb has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and a decent current ratio.
