Airbnb's Latest Report Gives Shareholders Big Hope for the Stock's Future

Airbnb (ABNB 1.03%) has recovered well since the onset of the pandemic, and it has continued to grow its business. In this clip from "3 Minute Stocks Updates" on Motley Fool Live, recorded on May 25, Motley Fool contributors Toby Bordelon and Brian Feroldi discuss Airbnb's recent quarterly report and why it appears to be on the up and up.

Toby Bordelon: Memorial Day weekend is coming up, right? There's going to be a lot of people staying in an Airbnb, I suspect. I am staying in an Airbnb this coming weekend, as I'm sure many of our members are as they maybe start traveling the summer season. Airbnb had a really good quarter. One thing I love about their presentation is that they're giving us comps in 2019, so pre-pandemic. This is important because when I look at hospitality companies, travel companies, there's really a two-step process when you're recovering from the pandemic. Step 1, getting back to where you were, recovering from that massive downturn, that massive hit when travel shut down, and then Step 2, moving beyond that. Making sure that you can continue growth, even actually recover and showing that you are doing better than you were before things started going south. Airbnb is a company that is beyond where it was pre-pandemic, continuing to do quite well. You see these comps here, those year to three-year comps are pre-pandemic. You can just go through this. Nights and experiences booked up almost 60% year-over-year but 26% higher than they were in 2019. Gross booking value. Seventy-three percent higher than they were pre-pandemic. That's the amount of dollars moving through their platform. Revenue up 80%. Beyond pre-pandemic levels. It keeps getting better. They did still have a net loss this quarter. But man, they're really close. You compare where they were last year at $1.2 billion net loss for the first quarter, $19 million net loss. I mean, we're talking a couple of days of revenue here. A couple of days of net income to get us where we need to be at that profitability. Maybe we'd even expect profitability coming up in Q2. You just see continued solid growth in this company. They give us some charts. You can take a look at it to really see visually what's going on with this quarterly revenue really taking off in the most recent quarter. Here's just a look at that quarterly net loss. You see, they really suffered in the pandemic, but look at that, almost back to even, almost back to profitability for this first quarter. That's really great. It tells me, I look at this company, a travel company, a hospitality company, and they've capitalized well. They've extended the success they've had in the pandemic, and now we're getting beyond that. Now, they're showing some nice growth. They've got a couple of things they did in this quarter. They announced the redesign of the platform that rolled out just a couple of weeks ago. They changed the way you search in some ways to try to open that up a little bit more, and let people discover more things. They say that the long-term stays they're seeing, 28 days or more, continue to be their fastest-growing category by trip length. It's at an all-time high. Six million active listings at the end of the quarter. So this is a company that has recovered and continues to grow its business.

Brian Feroldi: I don't know if you had a chance to play around with the redesign at all. I thought it was actually pretty cool. Hard for me to know if this is just, hey, it's a small redesign, feature upgrade. Brian Chesky, CEO and Founder, he was super excited about it. But, what do you think? Is this going to actually move the needle for people or is this just lipstick?

Bordelon: He called it the most significant update in the history of the company as I recall. I'm not quite as enthusiastic about it as he was. I do think it's cool. I played around with it a little bit. I do think it's really cool. I think it's going to drive demand a little bit. I think probably not a whole lot because what it's designed to do really is to show you things that you might not have uncovered before. Highlight some other things on the platform that you might necessarily be looking for. I'm not sure how many people go to Airbnb thinking, I have no idea where I want to go or what I want to do. Help me out. I think most people have a trip in mind and go look for a place to stay. Maybe, I think, at the margin you're going to see some improvement there. Maybe, you'll see some upselling as it helps people to discover accommodation, draw options maybe they did not know existed. Some of that may be there. I think maybe it can help people find things that they want wherever they weren't seeing in the old source. They might have gone to a hotel or some other platform. Maybe it keeps them on the platform. I think you will see an improvement, but I don't think it's suddenly going to just explode growth. I think it's a good thing, but we're talking, I think, incremental growth here.