Airbnb’s (ABNB) stock price declined recently, but it’s a good time to buy because travel demand is strong and the company continues to hold a leading competitive position in the alternative accommodation segment, Wedbush said in a note Tuesday.
“We think investors should take advantage of this period of relative weakness and see potential upside to near-term estimates following disappointing [Q2] guidance that we view as conservative given positive travel data points thus far in [Q2],” Wedbush said, adding that the company’s long-term growth potential remains strong, with promising opportunities as it expands beyond its core business, Wedbush added.
Near-term travel demand looks strong, boosted by events like the Paris Olympics from July 26 to Aug. 11, and Euro Cup from June 14 to July 14, according to the note. Positive engagement data and rising alternative accommodation demand suggest potential for Airbnb to exceed Q2 expectations, it added.
Wedbush is increasing its revenue and adjusted earnings before interest, taxes, depreciation and amortization estimates for Q2 and the second half of the year. Its 2024 revenue and adjusted EBITDA forecasts were also raised by 1% and 3%, respectively, the note said.
Wedbush upgraded Airbnb stock’s rating to outperform from neutral and raised its 12-month price target to $165 from $160.