Airbnb (ABNB 5.26%) was one of many companies adversely impacted by the coronavirus pandemic. The company helps facilitate travel worldwide, so it's not surprising that when a sometimes deadly virus reduces the appetite for travel, it will harm Airbnb's business.
While the virus is still widely circulating, more and more people are feeling better about traveling and booking more trips. That's partly due to the development of several effective vaccines against COVID-19. Indeed, more than 8.5 billion doses of such vaccines have been administered worldwide as of this writing.
That partial return to travel has helped Airbnb recover from revenue losses caused by the pandemic. Here's why it could be one of the best stocks to own in 2022.
Airbnb is gaining market share
Interestingly, Airbnb's revenue is already ahead of the levels it achieved before the outbreak. In its most recent quarter ended Sept. 30, Airbnb's reported revenue of $2.2 billion was 36% higher than in the same quarter in 2019.
Airbnb does not generate revenue by renting out its own locations. Instead, it brings together travelers and hosts and charges fees to each to use its service. The $2.2 billion in revenue it earned came from $11.9 billion in gross booking value on its platform.
Airbnb is gaining traction with consumers because of its platform's convenience and selection. On Airbnb, folks can find small rooms or large homes, places to stay in large cities or small towns, and the lengths of stay vary from a couple of days to a couple of months. That's all in stark contrast to hotels, which usually offer only a few room options in far fewer locations.
Airbnb gaining market share in the massive hotel and resort industry is great news for investors. In 2019, before the outbreak, Statista estimated the sector was worth $1.5 trillion in annual revenue. Of course, the pandemic slashed that overall market potential in 2020 to $610 billion, and it's only estimated to recover to $950 billion in 2021. That means there is plenty of room for travel to return to full strength, but Airbnb has already eclipsed its revenue total before the outbreak.
Moreover, Airbnb's quarterly booking value of $11.9 billion highlights plenty of room for it to grow by gaining market share, in addition to the overall industry rebounding to levels from before the outbreak.
Airbnb is an excellent stock trading cheaply
Airbnb undoubtedly has excellent prospects over the next several years as the travel industry rebounds and Airbnb takes a larger share of the market. Its stock is currently trading at 52-week lows, which makes it more appealing as an investment. Looking at its price-to-free-cash-flow ratio of 62, it's at the lowest of the year. Moreover, looking at its price-to-sales ratio of 19.7, it's very near the year's lowest price.
For those reasons and others, Airbnb could be one of the best stocks to own now as we head into 2022 and as the world recovers from COVID-19.