Airbnb (ABNB) reported solid first-quarter earnings growth late Tuesday, benefiting from the strong travel rebound in 2023. But Airbnb stock plummeted following results and a less-than-stellar forecast for the second quarter.
Earnings jumped to 18 cents per share, compared with a loss of 3 cents per share last year. Revenue leapt 20% to $1.82 billion.
Analysts polled by FactSet expected earnings to hit 14 cents per share. Wall Street projected revenue growth to slow for the fifth quarter in a row, rising 18.8% to $1.79 billion.
Nights and experiences booked rose 19% from last year to 121.1 million for the quarter. Total nightly bookings tumbled to 88.2 million at year-end, down from 100 million in the third quarter. Active listings also grew 18% during the quarter compared to last year. Meanwhile, free cash flow shot up 32% to $1.59 billion.
For the second quarter, Airbnb sees sales growing 12% to 16%, ranging from $2.35 billion to $2.45 billion. Analysts had predicted revenue growing to $2.42 billion for the quarter from $2.1 billion in 2022. The company expects adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, “similar to” last year on a nominal basis, but lower on a margin basis as it spends more on marketing.
Airbnb Stock Drops
Airbnb stock plunged 10.9% Wednesday after tumbling 14% premarket. Shares rose 1.1% during trading Tuesday prior to the report. Airbnb stock had rocketed 32% this year.
Shares spiked nearly 33% to 144.63 in the week after Airbnb’s fourth-quarter earnings beat on Feb. 14. MarketSmith indicates shares are consolidating with a 144.73 buy point after breaking out of a cup-with-handle base on Feb. 15.
Airbnb leads the Leisure-Travel Booking Group, according to IBD Stock Checkup. Shares have a perfect 99 Composite Rating, which combines a number of technical ratings into one easy-to-read score. Airbnb has a strong 80 EPS Rating with its explosive earnings growth in recent quarters. The stock has an 87 RS Rating as its relative strength line fell from its recent February high.
Brighter Outlook For Travel Industry
Meanwhile, major travel companies widely reported solid fourth-quarter growth, and in some cases announced figures higher than pre-pandemic 2019 levels, the U.S. Travel Association reported in its March 3 earnings roundup and travel industry forecast.
After the fourth quarter, most travel executives were highly optimistic about industry prospects, beyond just recovering to 2019 levels, the U.S. Travel Association reported in March, particularly since China reopened that month.
“I’ve never seen a more constructive backdrop for the industry,” Delta Air Lines (DAL) Chief Executive Ed Bastian said during its fourth-quarter earnings call.
Domestic travel volume recovered to 96% of its pre-pandemic 2019 levels last year, the U.S. Travel Association noted in November.
Major Travel Companies See Growth
The industry’s national nonprofit group forecasts travel volume to improve to 99% of 2019 levels in 2023, before growing to 104% in 2024. Total U.S. travel spending this year is seen growing 11% to $1.11 trillion.
For example, Marriott International (MAR) flew by estimates for its first-quarter results May 2. Earnings leapt 67.2% to $2.09 per share on a 33% jump in revenue to $5.62 billion. Analysts expected earnings of $1.85 per share on $5.45 billion in sales.
Further, Booking Holdings (BKNG) topped expectations as adjusted earnings rocketed 197% to $11.60 per share on 40% revenue growth to $3.78 billion.
Meanwhile, Hyatt Hotels (H) reported earnings of 41 cents per share on May 3, improving from its loss of 33 cents per share last year. Earnings results missed estimates of 51 cents. But the company’s 31% revenue spike to $1.68 billion beat forecasts of $1.58 billion.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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