Airbnb stock is jumping after record earnings, its first profitable year and a strong forecast. With people beginning to travel normally, the future looks bright.
Record profit during the holiday period led to earnings of nearly $2 billion for the year.
“Guest demand remains robust as active bookers reached an all-time high, driven by continued strength in domestic travel and long-term stays,” the analysts, led by Justin Patterson, said in a note late Tuesday.
Airbnb reported fourth-quarter gross bookings of $13.5 billion, compared with analysts’ expectation of $13.6 billion. Nights and experiences booked were 88.2 million, the highest fourth-quarter total ever, with a rebound in Asia-Pacific leading the way, though analysts had expected 89.7 million. The average daily rate was $152.81, higher than the $151.40 analysts expected.
Net income for the quarter was $319 million, or 48 cents a share, compared with $55 million, or 8 cents a share, in the year-ago period. Revenue rose to $1.9 billion from $1.53 billion in the year-ago quarter. Adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) was $506 million, a record high for the fourth quarter.
For the full year, Airbnb reported net income of $1.89 billion, or $2.79 a share, on revenue of $8.4 billion. Analysts expected net income of $1.74 billion, or $2.59 a share, on $8.36 billion in revenue.
Airbnb expects first-quarter revenue of $1.75 billion to $1.82 billion, while analysts had forecast revenue of $1.68 billion. The optimistic revenue forecast is based partly on European guests booking summer travel earlier this year, according to the company. The company’s first quarter guidance assumes that the number of nights and experiences booked through Airbnb will grow 20% year-on-year.
But the comments from executives suggests price cuts are coming. Airbnb said in its shareholder letter that it expects “new and improved pricing and discounting tools” that it’s introducing this year to “drive greater affordability and value for guests, support bookings growth, and therefore also help hosts be more successful.”
KeyBanc analysts raised their price target on the stock to $144 from $142 following the earnings, maintaining an Overweight rating. J.P. Morgan analysts stuck to their Neutral rating, but hiked their price target to $135 from $105.
The stock has many bullish confluences starting with the breaking of a major downtrend line which coincided with bottoming at the support zone around $90. We formed an inverse head and shoulders pattern there which added to the bullish case.
A major resistance zone that traders were targeting from the bottom bounce was the $130 zone. Looking to the left, you will see that this price zone has been both support and resistance in the past. These types of areas are key for technical analysis. They are strong points which attract price and we call them flip zones.
Today’s double digit pop post earnings is causing the stock to break right through the $130 zone. This will be bullish if we can confirm a close by the end of the trading day. Going forward, as long as Airbnb stock remains above $130, the uptrend momentum remains. The next resistance target comes in at the $160 zone.