Celebrations may be in order for Airbnb, Inc. (NASDAQ:ABNB) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts have sharply increased their revenue numbers, with a view that Airbnb will make substantially more sales than they'd previously expected.
Following the upgrade, the current consensus from Airbnb's 32 analysts is for revenues of US$5.4b in 2021 which - if met - would reflect a huge 57% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$4.8b of revenue in 2021. It looks like there's been a clear increase in optimism around Airbnb, given the nice gain to revenue forecasts.NasdaqGS:ABNB Earnings and Revenue Growth May 25th 2021
Notably, the analysts have cut their price target 7.4% to US$166, suggesting concerns around Airbnb's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Airbnb, with the most bullish analyst valuing it at US$240 and the most bearish at US$74.00 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Airbnb's past performance and to peers in the same industry. For example, we noticed that Airbnb's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 83% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 22% a year over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 22% annually. Not only are Airbnb's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The highlight for us was that analysts increased their revenue forecasts for Airbnb this year. They're also forecasting more rapid revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Seeing the dramatic upgrade to this year's forecasts, it might be time to take another look at Airbnb.
Better yet, Airbnb is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. For more information, you can click through to our free platform to learn more about these forecasts.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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