Airbnb (ABNB) stock is one of the worst S&P 500 stocks Friday after the travel booking and rental platform reported mixed results for its third quarter and provided a soft outlook for its fourth quarter.
In the three months ended September 30, Airbnb's revenue increased 9.9% year over year to $3.73 billion, boosted by an 8.5% jump in nights and experiences booked to 122.8 million. Its earnings per share (EPS), meanwhile, was down nearly 68% from the year-ago period to $2.13. The sharp decline in earnings per share was mostly the result of a tax benefit recorded in the third quarter of 2023.
"Airbnb had a strong Q3. Nights and Experiences Booked accelerated throughout the quarter and into Q4, despite a softer start due to shorter booking lead times compared to 2023," the company said in a statement. "We generated $1.1 billion of free cash flow during Q3 and $4.1 billion of free cash flow over the trailing twelve months, highlighting the strength of our cash-generating business model."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results were mixed compared to analysts' expectations. Wall Street was anticipating revenue of $3.72 billion and earnings of $2.14 per share, according to CNBC.
For the fourth quarter, Airbnb said it expects to achieve revenue in the range of $2.39 billion to $2.44 billion. The midpoint of this outlook, $2.415 billion, came up just shy of the $2.42 billion in revenue analysts are calling for.
Is Airbnb stock a buy, sell or hold?
Airbnb has lagged the broader market in 2024 and is currently up 10.5% for the year to date vs the S&P 500's 37% return. And Wall Street is on the sidelines when it comes to the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for ABNB stock is $132.04, representing a slight discount to current levels. Meanwhile, the consensus recommendation is Hold.
Financial services firm Oppenheimer is one of those with a Perform rating (equivalent to a Hold) on the large-cap stock.
"On the positive side, we see ABNB as the best-positioned travel company based on its strong global brand (limited Google risk) and ability to quickly adjust to travelers' demands through the combination of unique-supply and flexible terms," says Oppenheimer analyst Jed Kelly.
The analyst adds that the "work from anywhere" trends are likely to endure, which will provide strong tailwinds for ABNB to penetrate its massive total addressable market.
However, "investors appear to be baking in strong execution, and we see a high degree of multiple compression risk into uncertain macro with decelerating nights," Kelly warns.
Related Content
- Pinterest Stock Is Falling Despite an Earnings Beat. Here's Why
- Analysts' Top S&P 500 Stocks to Buy Now
- Is Uber Stock a Buy, Hold or Sell After Earnings?
-
A Lesson From the School of Rock About the MarketsIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I retired at 65 with $7.8 million and feel like I over-saved. My 40-something son is on the same path. Should I tell him to reconsider?We ask financial experts for advice.
-
A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and Around
It's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
-
To Reap the Full Benefits of Tax-Loss Harvesting, Consider This Investment Strategist's StepsTax-loss harvesting can offer more advantages for investors than tax relief. Over the long term, it can potentially help you maintain a robust portfolio and build wealth.
-
Social Security Wisdom From a Financial Adviser Receiving Benefits HimselfYou don't know what you don't know, and with Social Security, that can be a costly problem for retirees — one that can last a lifetime.
-
Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest EggA sizable nest egg is a good start, but your plan should include two to five years of basic expenses in conservative, liquid accounts as a buffer against market volatility, inflation and taxes.
-
Dow Adds 472 Points After September CPI: Stock Market TodayIBM and Advanced Micro Devices created tailwinds for the main indexes after scoring a major quantum-computing win.
-
October Fed Meeting: Live Updates and CommentaryThe October Fed meeting is a key economic event, with Wall Street waiting to see what Fed Chair Powell & Co. will do about interest rates.
-
The Delayed September CPI Report is Out. Here's What it Signals for the Fed.The September CPI report showed that inflation remains tame – and all but confirms another rate cut from the Fed.
