Why Airbnb (ABNB) stock is rising today

What happened:

Shares of online lodging platform Airbnb ( NASDAQ:ABNB ) rose 5.8% in the morning session after Bernstein SocGen Research Group reiterated its Buy rating on the stock, arguing that the current pessimism surrounding Airbnb is overblown. Analysts added that Airbnb’s revenue growth potential could significantly exceed 10%, especially with stable margins. After the initial burst, shares cooled to $122.08, up 3.9% from the previous close.

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What the market tells us:

Airbnb shares are quite volatile and have had 9 moves of more than 5% in the past year. Against that background, today’s move indicates that the market sees this news as significant, but not something that would fundamentally change its perception of the business.

The biggest move I’ve written about in the past year was about a month ago, when the stock fell 16.6% on news that the company reported its second-quarter earnings results. Its bookings missed and its revenue forecast for the next quarter missed Wall Street estimates. The company said: “…we are seeing shorter delivery times globally and some signs of slowing demand from US guests.” On the other hand, revenues slightly outperformed and adjusted EBITDA declined by a more convincing amount. Overall, this was a mixed but weaker quarter for Airbnb.

Airbnb is down 9.2% year-to-date, and at $122.08 a share is trading 27.4% below its 52-week high of $168.18 dated March 2024. Investors who bought shares of Airbnb worth $1,000 in the IPO would now follow in December 2020. You are looking at an investment worth $843.68.

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