Airbnb declines as fans forecast bleak concerns slowing down

(Reuters) – Airbnb shares fell more than 6% in early trading on Thursday after a weak outlook for the second quarter raised investor concerns about slowing growth at the vacation rental company and took the shine off strong quarterly earnings.

The Easter holiday, which occurred in the first quarter rather than the second quarter, and currency exchange effects were partly to blame for Airbnb’s current-quarter revenue forecast falling short of Wall Street’s lofty estimates.

It also expects the growth rate of room nights booked to be relatively flat on a sequential basis, but the company’s average daily rate is expected to be modestly higher year over year.

Moderate demand for leisure travel in the United States was also a concern for investors.

“Airbnb failed to deliver growth/increase in nights, which we believe is necessary to mitigate concerns about slower growth and downside risks to consensus estimates of accelerating growth in (2H24 and 2025),” Jefferies analysts said.

According to BTIG analysts, Airbnb’s forecast implies between 125 million and 127 million bookings in the second quarter. This compared to the consensus estimate of 129.2 million, LSEG data showed.

“While Airbnb topped the Q1 guide, it was just shy of the more aggressive Q2 buying and Q2 forecasts,” BTIG’s Jake Fuller wrote in a note to clients.

However, some analysts suggested that the stock’s decline stemmed from unjustified investor fears.

“We believe the pullback is an overreaction to weaker guidance in the second quarter… The outlook for 2024 is relatively unchanged, in our view,” said Dan Wasiolek, an analyst at Morningstar.

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Shares of Airbnb, which were up 16% so far this year until the recent close, were at $148.21 by 1356 GMT on Thursday. They traded at about 33.31 times their forward earnings estimates, compared to Booking Holdings’ multiple of 19.40.

(Reporting by Deborah Sophia, Kanaki Deka and Aishwarya Jain in Bengaluru; Editing by Devika Simnath)

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