Airbnb (ABNB-Q)

This will do better as interest tares come down. Also, the CEO is good. Buy on current weakness.

Has looked at business. Company is founder led/owned, with light asset requirements. However, company doesn't have history of strong returns on capital. Will take time for business to prove itself. Also, worried about restrictions on business (banned in New York etc.). Good if already own, but would not invest more at this time. 

Although the idea of the business is a great one, regulation is an overhang. It has also been accused of taking residential housing away from people who live locally.

Great company. Regulatory environment keeps changing on them because of the housing shortage in lots of places. Post-Covid travel explosion helped, but now slowing and that hurts. Competitors are taking their own game up a bit. When travel normalizes would be the time to take a look, as expectations will be more realistic.

They just reported, including a slowing in domestic bookings. Shares fell over 13% today. They missed EPS. This reflects a weakness in the US consumer who are feeling stretched.

He'd rather own businesses hurt during pandemic, but are better today. Cruising business is tough. He'd rather own a BKNG, ABNB, MAR or HLT.

EPS of 76c beat estimates of 68c. Revenue of $2.21B beat estimates by 2.5%. Airbnb demand softness -- especially for domestic travel in the US and EMEA -- is reflected in the platform's widening gap between room night and supply growth. Booking gains may taper to the low teens in 1Q, with the average daily rate likely to be a slight headwind amid tough comparisons. Though Airbnb's increased take rates for cross-border room nights aid revenue growth, this may be offset by lower occupancy rates and listings at competing online travel agencies. Adjusted Ebitda was again above consensus in 4Q, and the company's $6 billion announced buyback was likely aimed at offsetting stock compensation, which is high vs. tech peers. Overall, we are comfortable here.  It is becoming highly profitable and not that expensive now at 31X earnings. 
Unlock Premium - Try 5i Free

Shares are falling today despite a revenue beat and a share buyback, because the growth rate is moderating and comps will get tougher. There was exuberance coming into this report. Today's selling is a pullback. He likes the buyback news.

It rallied 4.2% on a day with no news. He questions if things have gone too far (in this current market rally)

Revenue growth expected to growth, but profits not increasing. Competition within sector hard. Difficult to determine future of business. Would recommend holding as demand for services will remain. Capital light business good for margins. 

It's moved up so much and many analysts don't like it. Shares are too high. 

Their conference call revealed stickiness in supply and are starting to see demand weakness.

Business has become profitable recently.
Current share price not cheap.
Business losing market share, but strong technology.
Would buy shares below $100/share.