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Airbnb Earnings Preview: Reopenings & Rivalries For ABNB Stock

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Anyone who regularly travels will likely have heard of Airbnb (NASDAQ: ABNB), the company synonymous with bookings for homestays and experiences. Unlike other travel stocks, Airbnb remains a darling among travel and hospitality sector investors because of its low capital expenditure model and strong product offering that helps it stay a hit among travellers. With ABNB stock prices up almost 70% year-to-date thanks to a myriad of pro-travel factors, Airbnb's Q2 2023 financial earnings are eagerly anticipated by investors and industry experts interested in the travel sector after a challenging 2022. Keen to learn more about the forecast for Airbnb stock? From understanding the critical catalysts for the San Francisco-based unicorn to considering how ABNB stocks are trading on the charts, here's all you need to know about Airbnb's Q2 2023 earnings with our preview and forecast guide.

What Is Airbnb?

Short for Air Bed and Breakfast, Airbnb is an online marketplace founded in 2008 that connects travellers to unique homes and experiences across the world. Instead of going the conventional hotel booking route, Airbnb provides an alternate service for travellers looking for accommodation, allowing them to book stays with hosts in their desired destinations.

Since bursting onto the travel and hospitality scene, Airbnb has done an impactful job of disrupting the industry. For homeowners, Airbnb provides a fuss-free way for them to rent out their homes without worrying about granular details like payment and marketing. As for guests, Airbnb homes often offer a more budget-friendly and homely abode for travellers seeking an alternative to comfortable hotels.

Rather than rest on its laurels, the company has gone to great lengths to innovate and improve its offerings. One such feature is Experiences, a platform where users can explore a locale from a local’s perspective through tours, events and programmes. Most recently, CEO Brian Chesky introduced a whole host of features coming to the Airbnb platform this year that focus on addressing user feedback and bringing Airbnb back to its core ideals of affordability and homeliness.

Airbnb Earnings Forecast & Expectations

Airbnb will be reporting earnings after the US market closes on 3 August 2023. Analysts on Wall Street have announced expectations for Airbnb's earnings per share to be around US$0.78 and for revenue to come in at about US$2.4B. If Airbnb manages to meet these expectations, this will represent a 77% growth from last year's Q2 expectations; a time when the travel industry was still plagued by lingering pandemic fears. As Airbnb faces stiffer competition from its hotel counterparts, we might see revenue levels shrink in the short term as vacationers might pick the most affordable lodging option given the inflationary environment. Yet, some analysts are remaining bullish as they highlight Airbnb's healthy free cash flow levels. This may result in more aggressive spending to boost the supply side of the business and get more homeowners on board with Airbnb, thus helping Airbnb scale its business in the long run as the business provides more lodging options for holidaymakers.

What Are the Key Catalysts That Could Impact Airbnb's Q2 2023 Earnings?

Airbnb’s Q2 2023 earnings could be affected by a variety of catalysts. Here are some of the most important ones to keep an eye on:

1. A surge in Travel Activity & Homestay Demand

The core revenue driver for Airbnb has always been short-term homestays for tourists seeking homestay experiences with a local touch. With many countries finally relaxing their travel restrictions, we're seeing travel demand return to its highs which may be a boon for Airbnb’s Q2 2023 earnings. As the pent-up demand for travel results in more active travelling, this could lead to a surge in homestay and activity bookings, thereby driving overall revenue levels for Airbnb. One example of the uptick in travelling activity is Japan's cherry blossom season taking place in April. This could possibly lead the charge in cross-border travel numbers and give investors and traders who are bullish on Airbnb a good reason to stay optimistic when it comes to demand for their booking services.

2. Untapped expansion

While the shortage of home listings partly contributed to unusually high prices in previous months, the narrative might be changing with Airbnb's latest announcements. According to the company, active home listings were up 18% in Q1 as Airbnb cites rapid growth in countries like Germany and Brazil. These new listings will help to boost the overall user experience of using Airbnb as holidaymakers now have even more choices when it comes to homestay options as there will be a greater range of price points and lodgings for them to choose from. This will ultimately help in extending Airbnb's reach to more price-conscious travellers that are choosing to travel during these high inflation times.

3. Competition from Alternative Accommodation Services

The shared accommodation market is becoming increasingly crowded, with services like Expedia's VRBO and Booking.com nipping at Airbnb's heels. On top of this, Airbnb will also have to contend with hotel giants like Marriott and Hilton, who are keen to distinguish themselves from Airbnb with their premium rooms and unmatched customer service. With such alternate options for accommodation seekers gaining popularity, vacationers and business travellers will have more choices when it comes to picking where to stay. This means Airbnb will constantly need to innovate so it stays one step ahead of the competition. While the recent slew of new features like Airbnb Rooms may draw interest from a crowd, successfully implementing them is necessary so Airbnb can sustain its homestay market leader advantage and offer solid guidance numbers for the rest of 2023.

4. Tough Macroeconomic Conditions

While Airbnb's management has done well in positioning itself for future innovation and growth, such decisions may do little in the broader scheme of things in light of macroeconomic headwinds. From a potential credit crunch to high-interest rates, the volatility present in today's economy is unfavourable for a tech company like Airbnb that largely relies on international tourism and spending to bolster its revenue numbers. With the future of economic conditions still relatively uncertain, Airbnb's Q2 2023 earnings could be under pressure due to softer consumer spending.

Based on the abovementioned factors, Airbnb is undoubtedly an exciting stock for investors as Q2 2023 earnings approach. With the potential for positive catalysts to drive Airbnb’s stock price, such as the relaxation of travel restrictions and the successful implementation of new features, investors should remain optimistic about ABNB's future performance. However, macroeconomic headwinds and the emergence of alternative homestay services could dampen Airbnb’s expected growth, making the Q2 2023 earnings report an even more intriguing event to watch out for.

Airbnb Earnings Preview: ABNB Stock Technical Analysis

Source: TradingView as of 2 August 2023

ABNB shares have been on a tear recently and surged upwards in an ascending channel. Although ABNB shares fell after reporting its Q1 earnings, the stock might have bounced back because of the bullish market sentiment and buoyant travel industry. In the near term, ABNB shares might trend towards the bottom of the ascending channel after getting rejected off the US$155 resistance. This combined with the decreasing daily volume of ABNB shares being traded might suggest exhaustion after the momentous 48% rally that began in late May.

Bullish ABNB stock traders might want to keep an eye out for key factors like sustained revenue growth and increased international expansion from Airbnb's upcoming earnings report. This may result in enough positive momentum for ABNB shares to break out of the US$155 resistance and head towards the US$175 to US$180 range, which acts as a potential supply zone.

Conversely, bearish ABNB stock traders may want to look out for factors like lower-than-expected bookings and declining margins from Airbnb's upcoming earnings report. This might result in a major sell-off that can give ABNB shares enough bearish momentum to break out of the ascending channel and trend back towards the US$105 range, which acts as a possible demand zone.  

The Bottom Line

With tourism numbers rising back to pre-pandemic levels, Airbnb and its ABNB shares are well-positioned to capitalise on the surging demand for travel. The company's focus on international expansion and improving its overall offerings will be pivotal in determining the revenue guidance provided by management. In addition, Airbnb's business model, which relies on individuals renting out their properties, allows for greater flexibility and lower costs compared to traditional hotel chains and may still prove to be the preferred option in these times of persistent inflation where users tend to be more price sensitive. This might work out in Airbnb's favour as the company retains its reputation of disrupting luxury hotels with its affordable but homely homestay options. Has this ABNB earnings forecast and preview inspired you to act and begin trading? Start your trading and investing journey with us today.

Additionally, if you're keen to find out more about investing in different industries, check out our guide to investing in renewable energy and the top AI stocks.

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