Stock of the Week: Airbnb

Online travel agency has thrived in the pandemic amid demand for holidays at home and remote working in new cities

James Gard 13 August, 2021 | 11:43AM
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US stocks have been on the agenda this week as reporting season rolls on. This week we’ve had earnings from eBay (EBAY), Walt Disney (DIS), Palantir (PLTR) and Airbnb (ABNB). It was close but our Twitter followers have plumped for the online travel agency ahead of the others.

Airbnb is relatively new to the stock market, floating in late 2020 just as the United States started to ease coronavirus restrictions. The company, which started as a house swap website in 2007, has defied the many challenges faced by the travel sector in the Covid-19 era by rising in value in a short time. At IPO the company was worth $47 billion but is now valued at just shy of $100 billion. This upwards trajectory has put the stock into 1-star territory, according to Morningstar analysts, who assign the shares a fair value of $84. Analyst Dan Wasiolek says that this fair value could be raised to $90 after upbeat second quarter results, but this is still significantly below the current price around $150. While Airbnb’s revenues grew to $1.3 billion in Q2, it’s still loss making as a public company, losing $68 million in the period (compared with a loss of more than $500 million in Q2 2020).

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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James Gard  is content editor for Morningstar.co.uk