Motley Fool analyst Neil Patel makes a bullish case for Airbnb, resting it on the platform’s scale, its push into experiences and services, and a forward price-to-earnings ratio of 26.9. The stock has been basically flat over the past five years, but consensus estimates put diluted earnings per share growth at a 21% compound annual rate from 2025 to 2028.
Patel argues Airbnb (NASDAQ: ABNB) is a smart buy right now, and he starts with size: 5.5 million hosts listing 9 million properties worldwide and 2.5 billion all-time guest arrivals. That two-sided network effect, he writes, makes the business difficult to disrupt, and the platform is positioned to add value as hosts, listings and bookings increase.
Brand recognition reinforces the moat. The company name is recognized widely enough that people use it as a verb, and Airbnb’s S-1 filing shows direct and unpaid channels drove 91% of site traffic in the first nine months of 2020. Patel suspects that trend still holds, which he says can support lower marketing expenses.
Airbnb adds car rentals and airport pickups
Last summer the company refreshed its platform to include experiences and services, with leadership aiming to turn it into a comprehensive travel tool. In May it introduced car rentals and airport pickups, alongside new experiences such as behind-the-scenes access to chefs and expert-led landmark tours.
The company is also leaning into artificial intelligence, already using it to improve customer support and to surface reviews based on what travelers care about most.
The stock trades at a premium to the S&P 500
Airbnb shares have been basically flat over the past five years, yet Patel says the next half-decade could be much better. He calls the stock’s valuation compelling. That is despite a forward price-to-earnings ratio of 26.9, a notable premium to the S&P 500 index.
That premium leans on earnings growth. According to consensus analyst estimates cited by Patel, Airbnb’s diluted earnings per share will grow at a compound annual rate of 21% from 2025 to 2028.
Source: Motley Fool
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