What happened
In an apparent delayed reaction to a not-well-publicized analyst rating that actually came out yesterday, investors are bidding up shares of recent IPO and virtual hotelier Airbnb (ABNB -3.40%) Tuesday afternoon. As of 3:30 p.m. EST, with trading winding down for the day, Airbnb stock is still up a healthy 9.5%.
So what
Why is it up? On Monday, analysts at NYC-based securities broker Tigress Financial announced they have initiated coverage of Airbnb stock with a "buy" rating, reports TheFly.com.
Image source: Getty Images.
More than just a category leader in renting out portions of patrons' homes as mini-hotels, Airbnb is a literal category-maker, according to the analyst. Airbnb basically created a large and still growing market, and while other companies (Booking Holdings, Expedia, and TripAdvisor, for example) have risen up to challenge it, Airbnb is still the company with the most recognizable name in this space. Tigress predicts it will "drive long-term shareholder value," reports TheFly.
Now what
Investors may need a bit of patience to profit from the stock, however. With coronavirus still rampant across the U.S. and around the world, Airbnb's sales growth remains under more-than-a-little pressure right now. Q3 sales were down 18.5% year over year. Yet even so, the fact that Airbnb is making more than $1.3 billion a quarter in sales at a time like this and earning profits, as well -- $219 million last quarter -- is nothing short of astounding.
If Airbnb can accomplish this in the middle of the Coronavirus crisis, just imagine how much its business might boom once the pandemic has passed.
