Airbnb stock jumped to its highest point since November 2021 after the company published strong financial results. It jumped to $193, up by 136% from its lowest point on record, with its valuation rising to over $110 billion. This rally may continue in the near future.
Airbnb published strong financial results
ABNB stock continued its strong rally after releasing its third-quarter earnings report. This report showed that its revenue jumped by 19% to $4.9 billion, with its net income soaring by 38% to $1.9 billion. These numbers were better than what most analysts were expecting.
Most notably, the company said that its free cash flow (FCF) rising by nearly 30% to $1.4 billion, with the gross booking value hitting $27.7 billion. These numbers showed that its revenue growth gained momentum, which is rare for a company of its size.
The company also hinted that the growth will continue in the coming quarters, helped by its innovation. It now expects that its fourth-quarter revenue will jump to between $3.22 billion and $3.28 billion, up by between 16% and 18%. These metrics were better than the average estimate of $3.16 billion.
For the year, the company is expected to grow in the high teens, higher than what analysts were expecting. Analysts were expecting its annual revenue to come in at $14.18 billion. These are encouraging numbers for a company that has not made any acquisitions.
Instead, the management has continued to innovate, including by allowing hotels to add their rooms to the platform. Thousands of boutique and independent hotels have already signed up so far. It has also added car rentals, which have become popular among users, and partnered with American Express. It also partnered with Meta Platform to use Muse agent.
Analysts have reacted positively to the earnings. Ygal Arounian, a Wedbush analyst, hiked his target from $200 to $237, suggesting a 40% upside. Shyam Patil of Susquehanna hiked the forecast from $200 to $220, while Rosenblatt increased it from $220 to $230. Other analysts who have upgraded the stock recently are from companies like Cantor Fitzgerald, Raymond James, and UBS Group.
Some of these analysts note that the strong growth will help to justify its relatively high valuation. Kyro datashows that the company has a forward price-to-earnings ratio of 32, which is higher than the sector median of 16.
Airbnb stock technical analysis
ABNB stock chart | Source: TradingView
The daily chart shows that the ABNB stock bottomed at $149.5 in September and then started an uptrend. It formed an up-gap today after publishing its financial results.
The stock has moved above the 50-day and 100-day Exponential Moving Averages (EMA). It has also moved above the Supertrend indicator and the median line of the Andrews pitchfork tool.
The stock will likely continue rising in the coming days as investors target the key resistance level of $200. This view will be confirmed if it jumps above the intraday high of $193.
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