I do love a company that is founder led, and Brian Chesky, CEO, has been there from the start of Airbnb. The metrics of the business are certainly pointing to a return to travel as gross booking value and revenue are delivering the largest gains Airbnb has had in years.
Airbnb makes approximately $6.6 billion in revenue each year, so it's encouraging to see that they are able to turn that into a profit. Personally I'm not a huge fan of businesses that make billions in revenue but can't eek out even that smallest of profits and rely on cash to keep funding the business.
Looking at the metrics there seems to be a decent amount of growth already baked into the price of Airbnb. EV / Revenue is hovering close to 10 which isn't unusual for a growing SaaS business but with a market cap of $69 billion you have to think how big can this thing get?
Interestingly, Airbnb in line with Hilton's (one of the best run hotel companies around) earnings of $6.6 billion but less profitable at $1 billion vs $1.55 billion. Both in the same industry and both set to benefit from a return to travel, but they have vastly different operating models. Comparing Airbnb to other businesses in the industry:
So it's pretty clear to see that Airbnb is priced for growth, and this is even after the most recent down turn which has seen it tumble from it's highs of $212 or a market cap of $129 billion. What people were thinking buy at those prices I'm not sure, but I don't recommend folks think this is doing to return to those levels any time soon. Rather stick to the fundamentals and compare it to it's competitors.
I do think Airbnb is a buy at these levels, personally I don't own, but it's on my watchlist. I've been a customer of Airbnb's for many years and the problem they are solving is very clear and the solution they are offering fits the market well. My earlier post about their new features being underwhelming still stands, I wasn't hugely impressed but they are well positioned to capitalize on the pent up travel demand worldwide.