The recent pullback in Airbnb creates an attractive entry point for investors looking to buy a quality growth company, according to Bernstein. “Recent share price weakness presents a compelling entry point, with bear fears largely discredited following Q2,” wrote analyst Richard Clarke in a Tuesday note to clients. “We see 30%+ potential upside, with an H2 acceleration as peers begin to slow, and ancillary revenue announcements in 2024 as key catalysts.” Shares of Airbnb have slumped 13% since the start of the month and sit lower even after the company posted in-line second-quarter results and lifted average daily rate and margin guidance. For the year, shares have rallied about 55%. Despite the recent stumble, Clarke remains bullish on the long-term outlook for the travel company that he believes has one of the deepest moats, optionality and fastest core top and bottom-line growth. ABNB 1M mountain Airbnb shares over the last month Although Airbnb looks expensive on a near-term basis, shares look “increasingly cheap” when accounting for the revenue increase from additional opportunities, Clarke wrote. “Quality companies are always expensive — but we see Airbnb as cheaper than BKNG on 2025 estimates,” he said, adding that Airbnb’s free cash flow yield should converge with Booking Holdings in 2024 and overtake it by 2025. — CNBC’s Michael Bloom contributed reporting
