Airbnb, Inc. (NASDAQ: ABNB) shares have advanced again above the $150 level; the company reported better than expected second-quarter results this week and expects to see strong trends in the third quarter.
Fundamental analysis: Adjusted EBITDA was $217 million in the second fiscal quarter
Airbnb’s business has proven improvements throughout the second fiscal quarter, and the company reported better than expected results on Tuesday. Total revenue has increased by 300% Y/Y to $1.34 billion, while the second quarter GAAP EPS was -$0.11 (beats by $0.32).
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“As vaccination rates increased and travel restrictions lifted in Q2, we saw consistent strength in North America, followed by a significant recovery in Europe. Gross booking value of $13.4 billion, more than quadrupled from a year ago and also shot up above 2019 levels by 37% based on the recovery of nights, combined with the strength of our ADR, said Brian Chesky, CEO of Airbnb.
Nights and experiences booked rose 197% during the second quarter; still, the company reported a net loss of -$68 million. The company’s management reported that they are consistently focused on improving the profitability of Airbnb, and despite the continued impact of the COVID pandemic, there is clear evidence of improvements.
It is important to mention that the adjusted EBITDA was $217 million in the second fiscal quarter of 2021, compared to -$397 million in the second quarter of 2020 and -$43 million in the second quarter of 2019. This is very important because the adjusted EBITDA provides clearer indications of quarterly performance and shows that Airbnb is on track to become profitable on a fiscal year basis.
Airbnb updated financial guidance for the third quarter and expects total revenue to be its strongest quarterly revenue ever while the adjusted EBITDA should be above the second-quarter levels. Airbnb is in a good position to grow its business, but this stock is not undervalued with a $90 billion market capitalization.
The company is still not profitable on a fiscal year basis, the book value per share is around $5, and there are better long-term investment opportunities at the moment. The Delta variant of the coronavirus continues to pose downside risks together with further new variants, especially ones that might not be stopped by existing vaccines.
Technical analysis: Airbnb shares have advanced again above the $150 level
Airbnb shares have advanced more than 15% since 19th July 2021, and according to technical analysis, the bulls remain in control of the price action for now. Rising above $160 supports the continuation of the positive trend, and the next price target could be located around $170.
On the other side, if the price falls below $140, it would be a “sell” signal, and we have the open way to $130.
Summary
Airbnb reported its second-quarter earnings results this week, total revenue has increased by 300% Y/Y to $1.34 billion, but the net loss was -$68 million. Airbnb expects to see strong trends in the third quarter; still, the Covid-19 pandemic continues to pose downside risks.
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