Airbnb shares soar 13% on strong Q4 earnings beat, margin overhang relief

Investing.com -- Shares of Airbnb Inc (NASDAQ:ABNB) jumped more than 13% in premarket trading Friday after the vacation home rentals company posted better-than-expected fourth-quarter earnings and issued an upbeat revenue forecast for the first quarter of this year on the back of strong travel demand.

The company reported Q4 per share profit of $0.73 surpassing analysts' estimates of $0.59. Revenue for the quarter came in at $2.48 billion, ahead of Wall Street’s expectation of $2.43 billion.

Airbnb reported gross bookings of $17.6 billion for the quarter, exceeding analysts' expectations of $17.2 billion, driven by higher-than-expected nights booked at 111 million, up 12% year-over-year compared to the projected 108 million.

The company said its "Nights and Experiences Booked" metric saw its highest growth of 2024 in Q4, contributing to a record 491 million bookings for the year and nearly $82 billion in gross booking value.

"We successfully outpaced the travel industry’s growth. We’re continuing to build on this momentum in 2025," the company said in a statement adding, since its IPO in 2020 Airbnb tripled both revenue and GBV.

Airbnb expects revenue in the range of $2.23 billion to $2.27 billion for the first quarter of 2025, while analyst estimates are at $2.3 billion.

EBITDA margin guidance of at least 34.5% for the full year 2025 was roughly in line with the Street’s estimate of 34.6%.

Bank of America (NYSE:BAC) analysts said the margin guide "may ease concerns" among investors, but added they "do not see an inflection in growth." BofA reiterated a Neutral rating on the stock.

However, Airbnb expects "a big product reveal in May, likely around guest experiences and services, which is a potential stock catalyst," analysts noted.

Separately, Goldman Sachs (NYSE:GS) analysts upgraded ABNB stock to Neutral from Sell after the report and raised the price target to $153 from $110.

They highlighted that the adjusted EBITDA margin floor for 2025 is likely "a multi-year floor in terms of margins (in our view) while also acting as a potential stimulant for growth exiting 2025."

While management indicated that new investment initiatives will need more time for clarity on growth and margin trajectories, Goldman sees a lower risk of an estimate revision cycle that could lead to share underperformance.

"As a result, we upgrade ABNB shares from Sell to Neutral, see a balanced risk/reward from after-hours trading levels," they added.

Pratyush Thakur contributed to this report.

This article first appeared in Investing.com