After two strong years of gains, the stock market just hasn't been able to get started in 2022. Even as investors look for a potential comeback from an extremely tough January, it seems as if new setbacks continually arise to bring a prospective recovery to an abrupt halt. That was evident on Wednesday, with the Nasdaq Composite (^IXIC +0.01%) reversing course from gains earlier in the week and losing 1% as of 11:30 a.m. ET.
There are a lot of confusing crosscurrents in the stock market right now, especially as corporate financial reports struggle to paint a consistent picture of the state of the economy. Travel disruptor Airbnb (ABNB 1.19%) saw solid gains after releasing its latest results, but The Trade Desk (TTD 3.19%) saw its shares fall sharply despite financials that seemed to signal ongoing growth. Let's look more closely to see what's behind this mixed reaction from investors.
Airbnb takes off
Shares of Airbnb were higher by more than 6% Wednesday morning. The alternative accommodations company reported fourth-quarter financial results that confirmed the ongoing recovery in the industry .
Key metrics for Airbnb remained strong. Revenue of $1.5 billion for the fourth quarter was up 78% year over year, closing a year of 77% growth to $6 billion. Guests booked more than 300 million nights and experiences during 2021, and the total value of those products nearly doubled from 2020's figures to $46.9 billion.
Airbnb also managed to turn a modest profit for the fourth quarter, posting better results than ever for that time of the year. Those figures were also considerably higher than they were in 2019 before the beginning of the pandemic.
Image source: Getty Images.
Airbnb cited several positives. It sees guests discovering rural communities but also returning to big cities. The omicron variant hasn't stopped guests from booking travel, and the trend toward long-term stays of 28 nights or more remains solidly in place. Airbnb also has shown success in attracting more hosts, with 6 million active listings at the end of 2021.
Investors like Airbnb's ambition to provide an alternative way for people to live anywhere they want. With trends still favoring remote and hybrid work, the company's ability to grow looks nearly unlimited right now.
The Trade Desk trades lower
Elsewhere, shares of The Trade Desk were lower by 7%. The programmatic advertising specialist's fourth-quarter financial report included plenty of favorable results, but investors seemed concerned about the sustainability of the company's upward momentum.
Fourth-quarter numbers included a 24% rise in revenue to $396 million, with adjusted net income coming in at $208 million. That produced adjusted earnings of $0.42 per share, up from year-ago levels and topping investor expectations. Total gross spending on The Trade Desk's platform rose 47% for the full 2021 year to $6.2 billion, and the company kept its customer retention rate above 95% to extend a streak that includes eight past years of client loyalty.
Yet The Trade Desk's first-quarter outlook didn't seem to inspire great confidence. The company sees revenue of $303 million or more, which would be at least 37% higher year over year from the first quarter of 2021. Management didn't offer guidance on earnings, though, citing a variety of factors.
The dynamics across the Nasdaq have included many instances of these types of responses to earnings results, with even strong performance failing to result in rising stock prices. That's surprising to many investors, but it's also natural following such a long period of impressive returns in the past several years.
