The onset of the coronavirus pandemic slashed travel demand worldwide. With a potentially deadly virus in circulation, fewer people were interested in getting on planes, trains, and buses and visiting new locations. As a travel facilitator that operates worldwide, Airbnb (ABNB 0.49%) understandably experienced a dip in customer demand and revenue as a result. 

What's impressed me, however, is the rebound in Airbnb's business since the administration of COVID-19 vaccines gained momentum. That recovery, the massive market size Airbnb is serving, and a fair valuation are the primary reasons Airbnb will be the next stock I buy. 

A family unloading luggage from their car.

Image source: Getty Images.

Airbnb has a trillion-dollar market opportunity 

In its fiscal third quarter ended Sept. 30, Airbnb reported revenue that was 36% higher than at the same quarter in 2019. Considering that the coronavirus is still circulating in high numbers, that could be a sign of robust travel demand. If the world can continue to protect against COVID-19 through vaccines and other means, that could unleash even more demand for worldwide travel.

What's more, Airbnb's platform offers travelers more options than traditional hotels. Folks can choose large homes or small rooms. And the rise of remote working could be a long-term tailwind for Airbnb. Typically, people staying somewhere for long periods prefer amenities that only a home can provide, which could lead them to choose Airbnb more often than hotels because of a more robust offering of desirable accommodations at reasonable prices.

Indeed, you can get hotel rooms that offer you similar home accommodations, like a washer and a dryer and a kitchen with a refrigerator, microwave, and oven. However, that will cost a traveler much more than renting a small room on Airbnb from a host who makes those services available.  

Importantly, Airbnb management took some pains to adjust the business to operate more efficiently structurally. Airbnb has reduced certain variable costs, decreased marketing expenses, and lowered fixed costs across the board. Management's efforts are bearing fruit -- in the third quarter, net income surged by 213% versus the same quarter in 2019. That means as its revenue accelerates with the progress against COVID-19, profits could grow alongside.

And Airbnb has a long runway for growth. According to Statista, the worldwide hotel and resort sector was worth $1.47 trillion in 2019. To put that figure into context, Airbnb earned $4.8 billion in revenue in 2019. If it can continue taking market share, it has the potential to grow into a business that can generate multiples of the revenue it generated in 2019.  

Is Airbnb stock expensive? 

Airbnb's relatively fair valuation makes the investment more attractive in my eyes, considering the massive opportunity. Airbnb is trading at a price-to-free cash flow and price-to-sales ratio near the lowest points all year. That's despite its proven efficiency improvements, a robust recovery from pandemic devastations, and a massive market opportunity. For those reasons, Airbnb will be the next stock I buy. That is, of course, contingent on the price remaining roughly the same as it is right now over the next week.