The Airbnb logo will be featured on Nasdaq’s digital billboard in New York’s Times Square on December 10, 2020.
Kena Betancur | AFP | Getty Images
Wall Street analysts are seeing a lot of growth for Airbnb’s business, but they don’t see much room for the stock to run after it more than doubled on its debut last month.
According to FactSet and reports sent to The Washington City Times, more than 20 analysts started covering the homesharing site every other year. Two-thirds propose holding the stock, and five of the 18 analysts with price targets expect the stock to fall.
Airbnb sold stock for $ 68 during its initial public offering last month, before the stock rose 113% to $ 144.71 on the first day of trading on December 10. The doll valued the company at $ 86.5 billion and more than $ 100 billion based on a fully diluted number of shares. The stock has remained roughly flat in the three weeks since the IPO, before falling 5.2% to $ 139.15 on Monday.
Analysts at Morgan Stanley started with coverage with the equivalent of a hold rating and a price target of $ 140, even though the company views Airbnb as a leader in the accommodation market. Morgan Stanley said investors can wait for a “better entry point” at about 16 times the estimated 2022 earnings.
“While we are optimistic about Airbnb’s industry and business model, we consider the current valuation to be reasonable,” the analysts wrote.
Likewise, Wedbush started with a hold recommendation and a price target of $ 151, which the company called a “dominant player in an attractive segment.” To justify anything higher, Airbnb would have to move to neighboring markets or wait until “the significant growth is able to catch up with the stock’s premium value from day one,” Wedbush analysts wrote.
The most bearish reports were from Deutsche Bank and Stifel, who both posted $ 130 targets on Airbnb’s stock. Stifel said his price estimate was based on a cash flow cash flow analysis that took into account the cost of capital and the growth rate.
Of the seven buy ratings that started the year, the highest price target came from Needham, which expects the stock to hit $ 200 in the next 12 months. Needham analysts predict that the alternative accommodation market could grow five or ten times its size.
Airbnb is also likely to benefit from “pent-up travel demand” in 2021 after the coronavirus pandemic last year forced so many consumers to cancel their plans, the company said, adding that the company’s business model is particularly attractive because it is independent. . on Google for traffic. Airbnb said in its prospectus that 91% of its guests came to the site directly or through unpaid channels in the first three quarters of 2020.
Needham says the price target is based on a multiple of 22 times sales by 2022.
“We believe major positives would accelerate the US stock’s rise and curb Covid earlier than expected in ’21,” they wrote. “Our main downside is that Covid is turning into a stepped multi-year headwind and / or stagnant traffic growth, which would lead the company to invest more aggressively in customer acquisition, presumably through Google.”
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