Airbnb Shares Fall Despite Earnings Growth

Airbnb (NASDAQ:ABNB) shares fell almost 7% in pre-market trading on Wednesday after the company said it expects growth to remain flat despite rapidly rising demand for travel.

ABNB reported Q2 EPS of 56c, compared with a loss of 11c per share a year earlier. The company's Q2 revenue was $2.10 billion, in line with consensus estimates. Airbnb reported 103.7 million night and experience bookings, missing the consensus estimate of 106 million. The company expects revenue for Q3 to be in the range of $2.78 billion to $2.88 billion, beating estimates of $2.78 billion. Airbnb said it expects Booked Nights and Experiences in Q3 to remain flat year-over-year. The company also expects ADRs in Q3 to be slightly higher than the same quarter last year, leading to a short GBV increase. The San Francisco-based company expects its Q3 EBITDA margin to be at or just below last year's all-time high of 49%. Airbnb announced a $2 billion share buyback program, saying it is very confident in the company's long-term growth and profitability prospects. A Citi analyst cut his price target to $140 from $160 but maintained his Buy rating on share gains in the hospitality sector. "Watching Q3 demand trends, our thesis on ABNB remains unchanged and we reiterate our Buy rating, but we are lowering our target price to $140 from $160 previously to account for potential macro headwinds," the analyst said. A Stifel analyst saw "healthy" results from Airbnb. "Despite encouraging margin progress, we believe visibility into 2H/2023 growth is weakened by macro uncertainty and the potential for travel demand to normalize," the analyst wrote in their note. We maintain our Hold rating at $125 PT."