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Why This Disruptive Tech Stock Is Still Worth Buying

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It's not too late to add Airbnb to your portfolio.

Airbnb (ABNB 4.77%) is revolutionizing the travel and tourism industry. By crowdsourcing real estate from a network of 4 million hosts, the company creates a unique experience for guests, offering a greater range of locations and lodgings than any traditional hotel.

In this Backstage Pass video, recorded on Nov. 5, Motley Fool contributors Taylor Carmichael and Brian Withers discuss Airbnb's third-quarter earnings, highlighting why it's not too late to buy the stock.

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Brian Withers: Taylor, let's talk Airbnb, how did their quarter go?

Taylor Carmichael: They had an outstanding quarter, maybe the best quarter that they've ever had.

Withers: I think shareholders were waiting for this.

Carmichael: Yeah. The stock was up 13% today, last I checked. They just had outstanding numbers. So, $2.24 billion in the quarter, up 67%. Their net income almost quadrupled for the quarter -- $834 million, up from a year ago. Their outlook, they didn't change. It's holding steady, expecting $1.44 billion next quarter. But given how they killed it this quarter, I think that's significantly under what they're likely to do. It's just an outstanding growth story.

Airbnb is macro cap. I mean, this is a $100 billion company, so it's a very large company. But to be growing this fastest impressively, I think there's significant upside for shareholders from here. Even though they came to the public market is very large. But their opportunity is over $3 trillion dollars, so they're really executing well. You can see from the stock chart, just today, put them over the S&P 500. COVID has hurt them, somewhat, over the last year or two obviously. But they are really beyond that now.

Some of the highlights: They had 80 million nights and experiences booked in the quarter. That's up 29% for the year. Their EBITDA margin is 49%, Brian. I mean, that's just outstanding. The host on this platform earned $12.8 billion by opening their homes to other people. They're really trying to expand the number of people that want to serve as host. They see that as they can add a lot more hosts. They already have a ton of hosts. But they can add a lot more hosts. It's really interesting they talk.

I bought Airbnb thinking this is just going to transform how we vacation, how we travel. But they made a point on the conference call. A lot of people are seeing Airbnb as a way to live. You travel from city to city to city. You can work anywhere now because we're working more and more remotely. Airbnb and Zoom make it possible to work anywhere around the world. You can go to Greece for three months, you can go to the Bermuda for two months. You can go to Norway, Mexico. I mean, you could just travel the world, living in different places. And about 20% of their rentals are long-term -- that's over 29 days, over a month staying in place. A lot of those, they didn't break it down, but I feel like a lot of those are not just vacationers, but people that are doing this as a lifestyle choice of traveling and staying in places and going to different places. There are people that give up their place they rent it on Airbnb while they move to other places. They have that income coming in while they are gone. It's a fascinating company and it's really revolutionizing our culture. They had an outstanding quarter.

Withers: That's really nice. I've been waiting for them to catch up after the coronavirus. I'm so glad you brought that host earned number, almost $13 billion. That's just for the quarter. That's just tremendous. That's about $1 billion a week. I love platforms that align with the people that are on them. The travelers are finding great places to live. The hoster enabling them to earn money. It's just a win-win-win all around. Any final thoughts on Airbnb?

Carmichael: I'm just really happy that I bought that stock. [laughs] I don't think it's too late. It's still barely above the S&P 500. I think it's a tremendous growth story going forward. They have a monopoly on what they do. I don't see any competitor beating their network effect. That network of hosts that gives them more optionality than anybody else.

Withers: It's certainly got the name brand out there.

Trevor Jennewine owns shares of Airbnb, Inc. The Motley Fool owns shares of and recommends Airbnb, Inc. and Zoom Video Communications. The Motley Fool has a disclosure policy.

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