"Airbnb Faces Growing Concerns Over Delta Variant Spread Despite Profitability Improvement"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Minji Lee] Despite Airbnb's earnings surprise in the second quarter, there are opinions that the stock price will find it difficult to show an upward trend in the second half of the year due to uncertainties caused by the spread of the Delta variant.

According to the financial investment industry on the 16th, Airbnb's revenue in the second quarter was $1.34 billion, a 299% increase compared to a year ago. Adjusted EBITDA was $220 million, significantly exceeding market expectations ($50 million). Total booking amount was $13.4 billion, greatly surpassing market expectations ($11.19 billion).

Jung-han Kim, a researcher at Samsung Securities, explained, "The second-quarter results reflect a broad recovery in travel demand that exceeded market expectations," adding, "Most indicators such as revenue and total lodging bookings are similar to or exceed pre-pandemic levels (February 2019), and in some regions including Europe, overseas lodging demand as of June has surpassed pre-pandemic levels."

In the third quarter, there are forecasts that total booking amounts will not surpass those of the second quarter due to uncertainties such as cancellations caused by the Delta variant. Researcher Kim said, "We expect the third quarter to also show record-high revenue and profitability, but this reflects the peak season effect," adding, "As guidance lowered, the stock price fell about 4.5% in after-hours trading, raising concerns about a peak-out possibility."

Nevertheless, the operating leverage effect from high growth in peak season sales and the base effect from first-half cost expenditures are expected to fully materialize, continuing the profitability improvement trend. In the mid to long term, structural benefits can continue amid trends of long-term stays and local preferences.

In the short term, the stock price is expected to show limited movement due to the emergence of the Delta variant as a game changer. Currently, the company's PSR is at about 18.7 times, maintaining a high premium compared to the peer group average of 5.2 times and Booking.com’s 8.7 times. Researcher Kim analyzed, "The premium has increased as expectations for travel demand recovery have been priced in," and "Considering the burden that further valuation multiple expansion is difficult, it will be limited in the short term."

This content was produced with the assistance of AI translation services.