‘One of the Best Compounding Stories Out There’: Bernstein Starts Airbnb at Outperform

By Senad Karaahmetovic

Bernstein analysts initiated research coverage on Airbnb Inc (NASDAQ:) with an Outperform rating.

The price target of $143 per share implies an upside potential of around 30% compared to yesterday’s closing price. Airbnb is described by the analysts as “a unique company within travel, an aspirational brand set at a sub-luxury price point with a moat built around its loyal customers and unique content.”

The analysts also acknowledge concerns centered around market saturation, however, they remain very positive on the Vacation Rental market.

“We see a far larger Vacation Rental size than most estimate ($150bn giving ABNB a ~37% share), rational supply that will emerge to fill the double-digit demand growth, and little reason why Airbnb can’t become a meaningful seller of other travel verticals: hotels, experiences and residential stays. This should keep Airbnb compounding its top line at >15%,” they told clients in a note.

All-in-all, they see ABNB as “one of the best compounding stories out there.” For investors, valuation shouldn’t be seen as an obstacle anymore as shares trade around 35% lower YTD.

Airbnb stock price is modestly up in pre-market Wednesday.

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