Airbnb Plans to Expand Beyond Vacation Rentals
Airbnb (ABNB) stock surged over 14% on Friday after the company reported earnings that beat expectations. CEO Brian Chesky outlined plans to transform the vacation rental platform into a comprehensive travel and living destination.
"We want the Airbnb app, akin to Amazon (AMZN), to be the go-to place for all your traveling and living needs," Chesky stated during the post-earnings call.
In its shareholder letter, Airbnb announced plans to launch new businesses adjacent to travel each year for the next four to five years. While specific details were not disclosed, Chesky highlighted Amazon's trajectory as an inspiration.
Airbnb currently garners usage from 1.6 billion devices annually. However, Chesky aims to increase the app's usage frequency from once or twice a year to once or twice a week.
The expansion requires an investment of $200-$250 million, impacting near-term margins. Analysts from JPMorgan maintain a Neutral rating with a price target of $160, citing concerns over margin compression and execution risks associated with new businesses. Jefferies analyst John Colantuoni recommends a Hold, emphasizing the need for greater visibility into new product contributions and sponsored listing timing.
In the fourth quarter, Airbnb's revenue increased 12% year-over-year to $2.48 billion, surpassing analyst estimates. Gross bookings also jumped by 14% to $17.6 billion, exceeding Wall Street expectations.