Jefferies analysts revised their rating on Airbnb (NASDAQ:ABNB) to Hold from Buy, also reducing the stock price target from $155 to $140 per share.
The downgrade is primarily due to a combination of factors. Firstly, there’s an observable slowdown in bookings, which heightens the risk of not meeting consensus expectations. This slowdown makes Airbnb’s growth prospects more dependent on potential expansion in its take rate.
Specifically, the analysts noted that Airbnb’s bookings outlook for the fourth quarter of 2023 indicates a deceleration in year-over-year growth to between 10-13% (compared to 14% in the third quarter). This slowdown is driven partly by a modest decrease in the number of nights booked. To meet consensus expectations of 12.5% growth in the calendar year 2024, nights booked would need to accelerate despite a reduction in the tailwinds from the pandemic recovery.
Additionally, Jefferies’ thorough analysis suggests that Airbnb’s potential for increased monetization is already factored into its stock price. This is evident in Airbnb’s valuation, which is 65% higher than the average for internet stocks, despite having comparable EBITDA growth. This suggests that the market may have already priced in the expected benefits of Airbnb’s business strategies.