The Trip Comes to an End: Airbnb Tumbles 8% on Low Fourth-Quarter Guidance

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It’s hard to believe that Airbnb (NYSE: AIRB) isn’t going to be the $100 billion company it was once supposed to be, but things just haven’t panned out this year. The stock has lost 28% of its value since the beginning of the year, and things are only going to get worse as the lodging rental service provider issues its fourth-quarter earnings report on February 21st, which will likely mark yet another quarterly decline for the company.

stock in Airbnb
Wednesday’s price dropped more than 13% after the business reported third-quarter results that exceeded Wall Street expectations but missed expectations for the fourth quarter.

In its third quarter, Airbnb improved both its top and bottom lines. According to Refinitiv, the firm reported sales of $2.9 billion, above analysts’ expectations of $2.8 billion and up 29% year over year for its greatest quarter ever. The consistent growth in nights and experiences booked as well as higher average daily rates were the main drivers of the income gain.

However, according to Refinitiv, Airbnb’s fourth-quarter revenue projection fell between $1.80 billion and $1.88 billion short of the analysts’ consensus mean of $1.85 billion.

In light of the fact that nations all over the world are still recovering from Covid lockdowns and battling high levels of inflation and rising interest rates, Airbnb advised its customers to “expect a continued, albeit choppy, recovery of cross-border travel to be a further tailwind to future results.”

Airbnb has also issued a warning that a strong dollar will result in a decrease in its global average daily fee. This, according to Evercore ISI analysts, was the report’s “major negative.” According to a note published on Tuesday, Evercore ISI kept its outperform rating on the company but took Airbnb off of its TAP Outperform list.

The experts concluded that underlying trends were robust.

Due to the surge in travel demand, Airbnb reported an increase in the number of new hosts using its platform.

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