Bernstein analyst on Airbnb stock: ‘we see 30%+ potential upside’

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on Aug 29, 2023
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  • Bernstein issued a bullish note on Airbnb stock on Tuesday.
  • Analyst Richard Clarke explained his view in a research note today.
  • The travel stock has lost nearly 15% in the month of August.

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Airbnb Inc (NASDAQ: ABNB) is trading sharply up on Tuesday after a Bernstein analyst issued a bullish note on the travel stock.

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The bull case for Airbnb stock

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Richard Clarke is super constructive on the travel company primarily because it’s lost about 15% this month and has created an attractive entry point.

Bear fears have largely discredited following Q2. We see 30%+ potential upside, with an H2 acceleration as peers begin to slow, and ancillary revenue announcements in 2024 as key catalysts.

The Nasdaq-listed firm came in ahead of Street estimates in its latest reported quarter as both margin and average daily rate improved. It also recently issued upbeat guidance for the future.

Note that the American Innovation Index recently named Airbnb Inc the most innovative lodging brand.

Airbnb has a wide economic moat

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The Bernstein analyst is convinced that Airbnb has a solid moat in the travel space that continues to help it grow faster than peers. Optionality was among other reasons he cited for his view on California-based company.

Richard Clarke agreed that Airbnb stock was expensive in the near term but added in his research note on Tuesday:

Quality companies are always expensive – but we see Airbnb as cheaper than Booking Holdings Inc on 2025 estimates.

He expects Airbnb to be in line with Booking Holdings in terms of free cash flow yield next year and even surpass its peer the year after. The alternative travel company forecasts its revenue to fall between $3.3 billion and $3.4 billion in the current quarter versus analysts at $3.22 billion.

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