Airbnb Shares Drop Over 8% as Weak Q2 Forecasts Raise Concerns

Airbnb experienced a significant premarket decline of over 8% following its projection of weaker-than-expected forecasts for the second quarter. 

Despite surpassing quarterly profit expectations, concerns over slowing growth and revenue outlook dampened investor sentiment.

Factors Contributing to Weak Forecasts:

Airbnb attributed its lower revenue projection for the current quarter to several factors, including the timing of the Easter holiday and currency-exchange impacts.

Concerns over moderating leisure travel demand in the U.S. further contributed to investor apprehension about the company’s growth trajectory.

Room Nights Booked Forecast:

The company forecasted a relatively flat growth rate for room nights booked in the second quarter compared to the previous quarter.

Despite the flat growth projection, Airbnb anticipates a modest year-over-year increase in average daily rates.

Analysts Perspectives:

Analysts from Jefferies noted that Airbnb’s failure to surpass expectations for nights booked in the first quarter raised concerns about a potential growth slowdown.

BTIG analysts highlighted that Airbnb’s second-quarter forecast implied fewer nights booked than consensus estimates, further impacting investor confidence.

Market Response:

Before the market opening, Airbnb shares were trading at $144.49, representing a decline in value.

Despite a 16% year-to-date gain, Airbnb’s forward profit estimates multiple stood at 33.31 times, higher than that of Booking Holdings.