Healthy Upside Potential: Airbnb Inc. (ABNB)

Airbnb Inc. (NASDAQ: ABNB) stock jumped 1.42% on Wednesday to $96.63 against a previous-day closing price of $95.28. With 4.33 million shares changed hands, the volume of the stock remained lighter than its average volume of 6.12 million shares. During the session, the Travel Services company that operates in wider Consumer Cyclical sector, reached to the highest price of $97.05 whereas the lowest price it dropped to was $94.34. The 52-week range on ABNB shows that it touched its highest point at $191.73 and its lowest point at $86.71 during that stretch. It currently has a 1-year price target of $133.00.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ABNB was down-trending over the past week, with a drop of -7.47%, but this was down by -18.42% over a month. Three-month performance dropped to -17.43% while six-month performance fell -12.47%. The stock lost -45.80% in the past year, while it has lost -41.96% so far this year. A look at the trailing 12-month EPS for ABNB yields 2.40 with Next year EPS estimates of 2.79. For the next quarter, that number is 0.23. This implies an EPS growth rate of 92.40% for this year and 8.39% for next year. EPS is expected to grow by 20.10% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -7.30%.

Float and Shares Shorts:

At present, 638.70 million ABNB shares are outstanding with a float of 383.22 million shares on hand for trading. On Oct 13, 2022, short shares totaled 18.26 million, which was 2.85% higher than short shares on Sep 14, 2022. In addition to Mr. Brian Chesky as the firm’s Co-Founder, CEO, Head of Community & Chairman, Mr. Nathan Blecharczyk serves as its Co-Founder, Chief Strategy Officer & Director.

Institutional Ownership:

Through their ownership of 65.59% of ABNB’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 8.95% of ABNB, in contrast to 35.47% held by mutual funds. Shares owned by individuals account for 27.92%. As the largest shareholder in ABNB with 5.37% of the stake, The Vanguard Group, Inc. holds 21,429,436 shares worth 21,429,436. A second-largest stockholder of ABNB, Capital Research & Management Co, holds 18,330,994 shares, controlling over 4.59% of the firm’s shares. Fidelity Management & Research Co is the third largest shareholder in ABNB, holding 17,390,225 shares or 4.36% stake. With a 4.02% stake in ABNB, the American Funds Growth Fund of Ame is the largest stakeholder. A total of 16,045,848 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.70% of ABNB stock, is the second-largest Mutual Fund holder. It holds 10,781,223 shares valued at 1.15 billion. Invesco QQQ Trust holds 1.45% of the stake in ABNB, owning 5,779,652 shares worth 617.9 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ABNB since 39 analysts follow the stock currently. There are 14 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 20 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ABNB analysts setting a high price target of $175.00 and a low target of $98.00, the average target price over the next 12 months is $128.52. Based on these targets, ABNB could surge 81.1% to reach the target high and rise by 1.42% to reach the target low. Reaching the average price target will result in a growth of 33.0% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ABNB will report FY 2022 earnings on 02/23/2023. Analysts have provided yearly estimates in a range of $2.80 being high and $2.35 being low. For ABNB, this leads to a yearly average estimate of $2.58. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Airbnb Inc. surprised analysts by $0.31 when it reported $1.79 EPS against a consensus estimate of $1.48. The surprise factor in the prior quarter was $0.11. Based on analyst estimates, the high estimate for the next quarter is $0.36 and the low estimate is $0.15. The average estimate for the next quarter is thus $0.24.

Summary of Insider Activity:

Insiders traded ABNB stock several times over the past three months with 4 Buys and 45 Sells. In these transactions, 25,271 shares were bought while 1,059,740 shares were sold. The number of buy transactions has increased to 100 while that of sell transactions has risen to 362 over the past year. The total number of shares bought during that period was 176,003,833 while 182,399,937 shares were sold.

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