.png)
SHOULD YOU BUY AIRBNB STOCK?
With Airbnb pulling back ever so slightly since reaching a market cap of $100B, Iβm beginning to reconsider the stock! Here are my proβs and conβs π
β‘ WHY I'M INTERESTED
Airbnb is disrupting the holiday rental industry (Reported to be worth around $1 Trillion) and has quickly become one of the ππππππ₯π¦ in this sector! Airbnb's reported revenue and customer growth also suggests that they will continue to ππππ‘ π ππ₯πππ§ π¦πππ₯π from their peers.
Itβs not just the holiday and hotel sector that Airbnb is going after! As international travel stopped because of the pandemic, Airbnb has accelerated itβs push into "ππ’π‘π-π§ππ₯π π¦π§ππ¬π¦". This category connects users with accommodation that is available for 1-3 months and moves Airbnb a step closer to disrupting the traditional ππ’π π π₯ππ‘π§ππ π ππ₯πππ§!
With estate agents ripe for replacement, I think that Airbnb has an ππ‘π’π₯π π’π¨π¦ π’π£π£π’π₯π§π¨π‘ππ§π¬ to dramatically increase its total addressable market by expanding on itβs short term travel offering with long term property rentals.
Lastly, Airbnb is increasingly adding more services to its platform beyond merely a place to stay! The company is transforming its platform into an ππ‘π§ππ₯π π ππ₯πππ§π£ππππ where customers can now book local tours, events, restaurants & more!
β‘ WHY I'M CONCERNED
Despite a valuation of $18bn in their last funding round, Airbnb announced that they would be pricing shares between $44-50. This gave the company a market cap of $26-30 billion which seemed like a ππ’π’π π’π£π£π’π₯π§π¨π‘ππ§π¬ for investors. Unfortunately, the stock eventually opened up at $146... 3 times that ππ‘ππ§πππ π©πππ¨ππ§ππ’π‘ and quickly reached a $100b market cap. Other tech IPO's also performed well this year π
Airbnb now has the same market cap as competitor Booking.com despite turning over and earning π ππ₯πππ§ππ’π‘ of their larger rival. Although I think Airbnb could 1 day surpass its competitor, the price of both stocks seem to already reflect this. Also, as much as I love Airbnb (Iβve used the platform for almost 10 years now), Iβm not 100% certain that they are safe from their π₯ππ©πππ¦.
I have seen a clear improvement in the likes of Booking.com (BKNG) recently and itβs clear that they are pivoting in a bid to ππ π¨πππ§π Airbnbβs business model. This attempt may be futile in much the same way retailers were π§π’π’ πππ§π
to respond to Amazon. Yet, thereβs a chance that Booking will do to Airbnb what FB has done to competing social media platformsβ¦ Copy them, then use their superior finances & network to ππ₯π¨π¦π π§ππ ππ’π π£ππ§ππ§ππ’π‘. Airbnb is now big enough that I doubt their rivals can "crush" them, however we will soon see how big Airbnb's moat really is.
Lastly, not only is Airbnb very pricey compared to their industry peers, the stock is very ππ«π£ππ‘π¦ππ©π full stop! In fact, only Snowflake, Lemonade & Virgin Galactic are more expensive than Airbnb on a π£π₯πππ-π§π’-π¦ππππ¦ π₯ππ§ππ’ (as seen below).
Not only that, but these 3 companies are growing their revenue between 4-10x faster than Airbnb. Therefore, if all 4 of these stocks perform similarly over the next couple of years, Airbnb could well become the most π’π©ππ₯-π£π₯ππππ stock on the market. Thatβs the kind of title that can spark a huge sell-offβ¦ And if it does π'ππ ππ πͺπππ§ππ‘π.
Make sure to check out these popular blog posts!
SHOULD YOU INVEST IN AURORA CANNABIS
COULD NETFLIX BE WORTH $1 TRILLION
#tradeinplaces #trading #trade #learntotrade #learntoinvest #etoro #investing #travelblog #travelling #stocks #stockmarket #stockstowatch #investor #investment #howtoinvest #howtotrade #airbnb #growthstocks #stockpicks
