Airbnb (ABNB -0.47%) shareholders beat the market this week, as their stock rose 10% through trading on Thursday, according to data provided by S&P Global Market Intelligence, compared to a 0.9% decline in the S&P 500. The rally put shares of the room rental specialist ahead of indexes so far in 2022, although the stock is still down over the past full year.
Gains this week were powered by Airbnb's fourth-quarter earnings report, which showed improving earnings power and accelerating sales growth.
The company announced on Tuesday that revenue jumped 59% in the selling period that ended in late December as the world continued emerging from the pandemic that had depressed travel for more than a year. Airbnb nearly fully recovered from the COVID-19 slump, too, with bookings landing just 3% below the same time in late 2019.
Management highlighted that volume rebound in a shareholder letter while also touting Airbnb's rising efficiency. It described the company's move from losses to a 27% adjusted profit margin in 2021 as a "striking improvement" heading into 2022.
Investors are even more excited about Airbnb's potential as the pandemic ends. There is strong demand for remote work setups, which are freeing many people to stay in places far from their offices. The company is seeing some of its best growth in long stays that last a month or more.
While these positive trends should support the business in 2022 and beyond, Airbnb is still highly sensitive to broader moves in the economy and consumer spending shifts. As a result, investors should expect volatility in this consumer discretionary stock whenever forecasts change around demand patterns in the travel industry.