Airbnb Stock Surges Amid Plans for Expansion Beyond Travel
Airbnb (ABNB) stock experienced a surge of over 14% in early trading Friday following a strong earnings report. CEO Brian Chesky outlined plans to transform the vacation rental platform into a comprehensive travel and living resource, similar to Amazon (AMZN).
"We want the Airbnb app to be one place where you can find everything you need for your travels and daily life," Chesky stated during the company's post-earnings call.
Airbnb plans to launch additional businesses adjacent to travel over the next four to five years. Chesky hinted at potential ventures like Amazon, which expanded its offerings from books to include media and other categories.
Currently, Airbnb serves 1.6 billion devices annually, with users typically accessing the app once or twice per year. The company aims to increase that frequency to weekly usage.
The expansion into new ventures will require an investment of $200-$250 million, potentially impacting short-term margins. Analysts at JPMorgan expect a potential margin compression of up to 200 basis points. Despite the growth plans, Jefferies analyst John Colantuoni recommends a hold rating with a price target of $165 due to uncertainties surrounding timing and execution of new offerings.
In the fourth quarter, Airbnb's revenue rose 12% year-over-year to $2.48 billion, exceeding analyst estimates. Gross bookings also climbed 14% to $17.6 billion, outperforming Wall Street predictions.