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Sunday, April 14, 2024

Airbnb Stock Up By 23% in 2021, Trading at More Than Two Times its IPO Price

Since the company’s IPO in December 2020, Airbnb’s share price has rallied remarkably. It is trading at $177.90 per share as of March 4, 2021, marking a 22.77% increase year-to-date (YTD). The figure was more than 2.5 times its IPO price of $68 per share.

Based on data from Tourism Economics, travel spending in the US declined by 42% in 2020 to $679 billion. Though it has bounced back to some extent, it remains below pre-pandemic levels.

Airbnb Bookings Recovered to 70% of Pre-Pandemic Levels in January 2021

According to the research data analyzed and published by Finaria, in tandem with its share price growth, Airbnb also saw its market value soar to $110.71 billion as of March 4, 2021. That was higher than the market value of rivals Expedia ($20B), Booking Holdings ($93B) and TripAdvisor ($5B).

Since its 2008 launch, Airbnb has generated approximately $110 billion for the hosts using its platform. Its revenue grew fourfold between 2015 and 2019, going from $919 million to $4.8 billion. As of April 2020, its bookings were down by 72% YoY.

But by June 2020, domestic reservations had more than doubled to reach 80% according to The Economist. Stays within 200 miles from home accounted for 56% of bookings, up from 31%. By the end of January 2021, bookings had recovered to 70% of pre-pandemic levels.

Based on its estimates, Airbnb has a total addressable market of $3.4 trillion. Its gross booking value in 2019 was $38 billion, equivalent to 1% of its total potential. However, at $177 per share and $111 billion valuation, the company is trading at approximately 31 times its consensus 2021 revenue.

Airbnb’s sales are projected to increase by 37% in 2021. By comparison, Expedia’s revenue is set to soar by 50% in 2021 and 35% in 2022. At its $23 billion valuation, Expedia is trading at thrice its projected 2021 revenue.

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