Analysts are suspicious of Airbnb's stunning debut

Airbnb shines in a black year for the tourism industry.

On December 10, it debuted on the Nasdaq in style;

it shot up from $ 68 in the IPO price to $ 146 in the first change, a level that exceeds -up to $ 157- a week later with a cumulative rise of 130%.

Its capitalization is above 94,000 million dollars (76,700 million euros at the current exchange rate).

The tourist accommodation reservation platform has chosen the best time to quote, with the markets beginning a recovery under the expectations of the Covid vaccine.

In addition, despite the pandemic, 2020 has been an exercise of numerous and successful premieres on Wall Street, such as Warner Music Group, which gained 20% on its first day, or Lemonade, which rose 140%.

"Airbnb is an icon of the sharing economy," says Avner Meyrav of eToro.

“The market had been waiting for its IPO for a long time.

When international air travel was suspended, the company's business began to recover again;

people were looking to escape within their own countries and there were even those who were looking for a change of scenery ”, he adds.

But Meyrav finds another reason for Airbnb to launch its IPO: “Like many startups, Airbnb offered its workers options on guaranteed shares that expire this year.

This internal pressure could be one of the main factors that led the company to go public despite the recent difficulties ”.

click on the photo

Airbnb has suffered greatly from the pandemic, with massive cancellations of reservations due to confinement and the tourism debacle.

In the second quarter its revenues fell 72%, and 19% in the third, to 1.34 billion dollars.

Its valuation fell to $ 18 billion in April, far from the $ 31 billion in 2017, according to a funding round.

The company has carried out layoffs, cut costs and raised $ 1 billion in venture capital funding.

But Airbnb's spectacular premiere collides with the views of some analysts.

“Her cutting-edge model has taken her to stratospheric levels of valuation,” explains Morningstar's Dan Wasiolek.

In his opinion, the reasonable price should be $ 60 - compared to the current $ 157 - which would imply an average annual growth in sales of 15% between 2020 and 2029, and an increase in operating margins to 25% in 2029, vs. 10% in 2019. “Our valuation assumes a market capitalization of over $ 40 billion,” says Dan Wasiolek.

"We believe that Booking offers a more complete network in the alternative accommodation business with structurally higher margins," he adds.

Admiral Markets also calls for calm.

“A popular company that goes public, like Airbnb, gives way to excitement.

From there, the reality of the intrinsic fundamentals will take over, at the risk of encountering unpleasant surprises in the short term ”, they explain.

The firm highlights three key factors to take into account: “Airbnb should be able to quickly resolve difficulties related to the pandemic;

it needs to show that its business model is starting to be profitable so as not to be permanently dependent on leverage through fundraising, and volatility could increase after the

green shoe

. "

Remember that "it does not plan to distribute a dividend in the immediate future in view of its growth model."

IG Markets explains that "diversifying the offering could be a significant part of the business by 2022, although it would still depend heavily on accommodation bookings for income."

A reference company

Offer.

IG Makets points to Airbnb's main competitors as HomeAway, VacayHero and HouseTrip.

However, he acknowledges that "Airbnb's presence around the world far exceeds any of these companies."

For the firm, "it continues to be the forerunner of the market, in addition to having more accommodations than the five largest hotel groups combined (a staggering seven million)," he says.

Presence.

Airbnb's income depends mainly on the seasonality that reflects tourism activity.

"It varies based on various parameters, such as school holidays, or country and weather," Admiral Markets describes.

North America and EMEA represent 41% and 40% of its revenues, respectively.

Pandemic.

It has more than seven million registered properties in more than 220 countries and regions to choose from.

Apart from accommodation, Airbnb offers restaurant reservations and experiences, "an area whose interest has increased this year as a result of the coronavirus pandemic," says IG Markets.

Users can choose from more than 50,000 activities, many of which can be enjoyed online.