Is Airbnb Really Worth $10 Billion?

Airbnb is on the verge of securing hundreds of millions in new funding at what The Wall Street Journal is reporting at a $10 billion valuation. Is that really fair when larger rival HomeAway (NASDAQ: AWAY  ) still trades for less than $4 billion in market value? Fool contributor Tim Beyers contrasts the two businesses in the following video.

Airbnb is the faster grower. Revenue more than doubled last year to $250 million, The Journal reports, versus a 24% jump for HomeAway. The latter still has more listings, however: 890,000 paid listings versus about 600,000 for Airbnb.

HomeAway is showing strength in other areas, as well. Total visits to its site improved more than 15% in 2013 while the average revenue per listing improved more than 13% after accounting for currency effects. Cash flow from operations grew 9%, leaving the company with close to $400 million in cash and investments as of December. Another $350 million is on the way via a debt offering.

HomeAway plans to raise at least that much in convertible notes due 2019. For its part, Airbnb is looking to raise between $400 and $500 million, The Journal reports. Expect both companies to put serious capital to work at disrupting what remains of the traditional hotel industry.

Is there an opportunity for common investors to profit? HomeAway thinks so. In a recent interview for Travel + Leisure, vice president Alexis de Belloy said the short-term rentals market accounts for one-fifth of all U.S. hotel revenue. If he's right, and if the ratio shifts even slightly, Tim says outrageous growth -- and generous returns for stock investors -- will follow. Now it's your turn to weigh in. Do you think HomeAway can thrive alongside Airbnb? Why or not? Sound off in the comments section below.

6 more stock picks poised for incredible growth
Whether or not you believe in Airbnb and HomeAway, the truth is disruptions happen all the time. We know because we've seen David Gardner profit from tectonic shifts time and again, racking up stock gains like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2891350, ~/Articles/ArticleHandler.aspx, 9/4/2015 3:01:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Tim Beyers

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at or send email to For more insights, follow Tim on Google+ and Twitter.

Today's Market

updated Moments ago Sponsored by:
DOW 16,055.46 -319.30 -1.95%
S&P 500 1,917.23 -33.90 -1.74%
NASD 4,667.51 -65.98 -1.39%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/4/2015 2:46 PM
AWAY $27.70 Down -0.81 -2.84%
HomeAway CAPS Rating: ***