Airbnb Overhauls Business Model, Shares Set for Significant Bounce
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: CNBC
- Business Overhaul: Airbnb is revamping its stagnant hospitality and rental businesses, with Wells Fargo upgrading its rating from equal weight to overweight and raising its price target from $136 to $178, indicating a potential 24.8% upside from Tuesday's close.
- Accelerated Innovation: Analyst Ken Gawrelski noted that Airbnb is at a significant business inflection point, expecting a shift from two years of decelerating growth and margin compression to accelerating growth and expanding margins from 2026 to 2028.
- Service Diversification: The company aims to add more hotel listings to its platform while integrating ride and excursion-booking services to revitalize its lagging stock performance, demonstrating a keen response to market demands.
- AI Implementation: Airbnb is leveraging artificial intelligence to enhance customer service and property recommendations from its search engine, with expectations that these efforts will ramp up in the coming months, further boosting share prices.
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Analyst Views on ABNB
Wall Street analysts forecast ABNB stock price to rise
29 Analyst Rating
12 Buy
16 Hold
1 Sell
Moderate Buy
Current: 141.870
Low
107.00
Averages
144.85
High
180.00
Current: 141.870
Low
107.00
Averages
144.85
High
180.00
About ABNB
Airbnb, Inc. operates a global platform for stays and experiences. The Company’s marketplace model connects hosts and guests online or through mobile devices to book spaces and experiences around the world. The Company has built its platform to onboard new hosts, especially those who previously had not considered hosting. It partners with hosts throughout the process of setting up their listing and provides them with a suite of tools to manage their listings, including scheduling, merchandising, integrated payments, community support, host protection, pricing guidance, and feedback from reviews. Its Website and mobile applications provide its guests with a way to explore a variety of homes and experiences and an easy way to book them. Its technology platform powers its two-sided marketplace and enables its global network of hosts and guests. It owns a trademark portfolio with protection in 220 countries in which it operates for its primary brands, AIRBNB, and its Belo logo.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Share Expectations: The firm expects Airbnb to double its OTA hotel market share in its core five markets from 4% to 8%, which will significantly enhance the company's financial performance.
- New Growth Initiatives: Analysts noted that new growth initiatives, such as hotels and sponsored listings, will contribute to accelerating room nights growth and margin expansion, particularly driven by stronger merchandising in New York City and AI search capabilities.
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- Accelerated Innovation: Analyst Ken Gawrelski noted that Airbnb is at a significant business inflection point, expecting a shift from two years of decelerating growth and margin compression to accelerating growth and expanding margins from 2026 to 2028.
- Service Diversification: The company aims to add more hotel listings to its platform while integrating ride and excursion-booking services to revitalize its lagging stock performance, demonstrating a keen response to market demands.
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- Significant Fuel Price Impact: U.S. gas prices have risen by over a third since February 28, reaching $4.02 per gallon, prompting consumers to seek more economical travel options, reflecting the direct impact of Middle Eastern conflicts on the market.
- Used EV Market Rebound: The price of used electric vehicles has firmed up after months of decline due to rising oil prices, indicating a recovery in consumer demand for EVs, which may drive rental companies to invest more in electric vehicle offerings.
- Strong Performance of Rental Platforms: Car Rental Gateway reported a 16% relative increase in EV and hybrid bookings in March, suggesting that rental companies could gain a competitive edge in a high fuel price environment by attracting more customers looking to save on fuel costs.
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Wells Fargo Upgrades Airbnb to Overweight Amid Growth Inflection
- Rating Upgrade: Wells Fargo upgraded Airbnb from Equal-weight to Overweight, with analyst Ken Gawrelski highlighting a significant business inflection point, anticipating accelerating growth and margin expansion from 2026 to 2028.
- Market Share Expectations: The firm expects Airbnb to double its OTA hotel market share in its core five markets from 4% to 8%, which will significantly enhance the company's financial performance.
- New Growth Initiatives: Analysts noted that new growth initiatives, such as hotels and sponsored listings, will contribute to accelerating room nights growth and margin expansion, particularly driven by stronger merchandising in New York City and AI search capabilities.
- Price Target Increase: Wells Fargo raised its price target for Airbnb from $136 to $178, based on a 25X multiple of the 2028 EPS estimate, reflecting confidence in the company's future growth trajectory.
See More
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See More
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- Business Overhaul: Airbnb is revamping its stagnant hospitality and rental businesses, with Wells Fargo upgrading its rating from equal weight to overweight and raising its price target from $136 to $178, indicating a potential 24.8% upside from Tuesday's close.
- Accelerated Innovation: Analyst Ken Gawrelski noted that Airbnb is at a significant business inflection point, expecting a shift from two years of decelerating growth and margin compression to accelerating growth and expanding margins from 2026 to 2028.
- Service Diversification: The company aims to add more hotel listings to its platform while integrating ride and excursion-booking services to revitalize its lagging stock performance, demonstrating a keen response to market demands.
- AI Implementation: Airbnb is leveraging artificial intelligence to enhance customer service and property recommendations from its search engine, with expectations that these efforts will ramp up in the coming months, further boosting share prices.
See More
Amazon and Airbnb Continue Expansion Efforts
- Amazon Investment Surge: Amazon is expected to invest around $200 billion across its business this year, supporting AWS's growth, which reported a 24% year-over-year revenue increase in Q4, indicating strong market demand and profitability.
- Space Network Expansion: Amazon's low Earth orbit satellite network, Leo, enhances its direct-to-device services through the acquisition of Globalstar, which is expected to provide more reliable connectivity for businesses, further expanding its market share in e-commerce and cloud services.
- Airbnb Platform Expansion: Airbnb achieved a 12% revenue growth and a 16% increase in bookings in Q4, projecting a net income of $2.5 billion by 2025, showcasing its strong performance in the travel market and ongoing growth potential.
- Shareholder Return Strategy: Airbnb repurchased $3.8 billion worth of shares in 2025, reducing its share count by 6%, which enhances shareholder equity, while projecting revenue growth of 14% to 16% in 2026, indicating a promising investment outlook.
See More
Amazon and Airbnb's Growth Potential
- Amazon's Investment Plan: Amazon is expected to invest around $200 billion across its business this year, which will support growth in its cloud division AWS, which reported a 24% year-over-year growth in Q4, indicating strong market demand and profitability.
- Satellite Network Expansion: Following the acquisition of Globalstar, Amazon's low Earth orbit satellite network, Amazon Leo, will enhance direct-to-device services, enabling businesses to bypass public internet and connect directly to AWS, thereby increasing its market reach in e-commerce and cloud services.
- Airbnb Revenue Growth: Airbnb achieved a 12% year-over-year revenue growth in Q4, with gross bookings rising by 16%, reflecting the platform's sustained appeal and market expansion capabilities, with projected net income of $2.5 billion in 2025.
- Shareholder Return Strategy: In 2025, Airbnb repurchased $3.8 billion worth of shares, reducing the share count by 6%, which enhances shareholder ownership, while projecting revenue growth of 14% to 16% in 2026, showcasing strong future growth potential.
See More
