The Airbnb logo will be displayed on the Nasdaq digital billboard in Times Square, New York on December 10, 2020.
Kena Betancur | AFP | Getty Images
Wall Street analysts predict a lot of growth for Airbnb’s business, but they do not see much room for the stock to run after more than doubling last month.
According to FactSet and reports sent to CNBC, more than 20 analysts began covering the home page website to begin the year. Two-thirds suggest the stock is held, and five of the 18 analysts who have price targets expect the stock to fall.
Airbnb sold its shares in its stock exchange at $ 68 last month before rising 113% on its first trading day on December 10, to $ 144.71. The doll valued the company at $ 86.5 billion, and more than $ 100 billion based on a fully diluted share. The stock was roughly flat in the three weeks since the stock market, before falling 5.2% to $ 139.15 on Monday.
Analysts at Morgan Stanley have started coverage with the equivalent of an investment rating and a price target of $ 140, although the firm views Airbnb as a leader in the accommodation market. Morgan Stanley said investors can wait 20 times an estimated income for 2022 at a “better entry point”.
“While we are strong on Airbnb’s business and business model, we see that the current valuation is fair,” the analysts wrote.
Similarly, Wedbush coverage began with a recommendation and a price target of $ 151, which the company called a ‘dominant player in an attractive segment’. To justify something higher, Airbnb will have to move to adjacent markets or wait until “the significant growth can catch up with the premium valuation the stock receives from day one,” Wedbush analysts wrote.
The most notorious reports were from Deutsche Bank and Stifel, both of which put $ 130 targets on Airbnb’s share. According to Stifel, the price estimate is based on a discounted cash flow analysis that takes into account the cost of capital and growth rate.
Among the seven buy ratings that would begin this year was Needham’s highest price target, which expects the stock to reach $ 200 in the next 12 months. Analysts at Needham predict that the alternative housing market could expand five or ten times from where it is today.
Airbnb is also likely to benefit from ‘pent-up travel demand’ in 2021 after the coronavirus pandemic forced so many consumers to cancel their plans last year, adding that the company’s business model is particularly attractive because it does not rely. on Google for traffic. Airbnb said in its prospectus that 91% of its visitors came to the site directly or through unpaid channels in the first three quarters of 2020.
Needham says its price target is based on a multiple of 22 times revenue in 2022.
“In our opinion, major uptrend drivers will accelerate US stock earnings and Covid will, in our opinion, decline sooner than expected in 21,” they write. “Our main disadvantage is that Covid is turning into an increasing perennial headwind and / or stagnant traffic growth that will lead to the company investing more aggressively in acquiring customers, presumably through Google.”
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