Please ensure Javascript is enabled for purposes of website accessibility

Why Airbnb Stock Popped Again Before Earnings

By Rich Smith - Feb 24, 2021 at 5:03PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Tomorrow's losses could be ugly, but the future still looks bright.

What happened

Airbnb (ABNB -5.16%) stock jumped 11% in early trading Wednesday before retreating a bit as the day wore on. By the time the closing bell rang, Airbnb stock ended up 6.7%.

So what

Just 24 hours remain before Airbnb reports its fiscal Q4 earnings -- tomorrow after close of trading. And while investors seem eager to see the results, they might not want to get their hopes too high up. According to analysts who follow the stock, Airbnb is probably going to report a loss of epic proportions -- as much as $9.16 per share, on sales of just under $748 million.  

Not everyone is in agreement on that. On Monday if you recall, analysts at Loop Capital predicted Airbnb will do better than those low expectations and upgraded the stock to a buy.

Stock chart shows a red line going down in 2020 and going back up in 2021.

Image source: Getty Images.

Now what

Even if Airbnb fails to "beat earnings," though, there's still the potential for the stock to fly higher. Why?

Well, consider: New reports of coronavirus infections are way down -- barely 71,000 reported yesterday, and only 56,000 the day before that. While those numbers both sound pretty big, they're mere fractions of the nearly 300,000 cases reported at the peak of the pandemic, Jan. 2.  

The Biden administration, meanwhile, is taking affirmative steps to drive those numbers even lower. On Wednesday, it was reported that the federal government is shipping out 25 million masks to workers in "community health centers ... food pantries and soup kitchens," to help tamp down infections among the people most in need. And with vaccinations at the rate of 1.5 million a day -- accelerating toward 3 million per day by next month -- hopes are emerging that the pandemic and the recession it caused could soon be put to bed, giving rise to an earlier-than-expected economic recovery.      

The sooner that happens, the faster folks will resume traveling, taking vacations -- and booking rooms with Airbnb again. No matter how big Airbnb's losses when it reports earnings tomorrow, that's good news for Airbnb stock.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Airbnb, Inc. Stock Quote
Airbnb, Inc.
ABNB
$89.08 (-5.16%) $-4.85

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.