Airbnb (ABNB 1.17%) is one of my favorite stocks to buy right now. The worldwide travel facilitator is rebounding strongly after the devastations of the pandemic. Of course, the world is still grappling with the outbreak, but widespread vaccination in most parts of the globe has given governments the confidence to ease travel restrictions. 

There are more reasons to buy Airbnb stock than the bounceback in travel demand. Its asset-light business model is generating strong cash flow, Airbnb has a massive market opportunity ahead, and it offers a better selection to travelers than traditional hotels. That said, the increasing risk of a recession is one reason to hesitate. Keep reading for more detail on each. 

1. Asset-light business model 

Airbnb's business model is favorable for generating cash flow. The company does not own or operate any of the listings on its platform. Instead, it encourages hosts and travelers to transact on its website, and takes a percentage of each booking. This way, Airbnb does not need to invest massive sums in building hotels or resorts. Furthermore, it does not need to maintain these properties, saving the expense of staff, landscaping, and utilities. 

Chart showing Airbnb's annual cash from operations rising sharply since 2021.

ABNB Cash from Operations (Annual) data by YCharts

This business model has helped Airbnb generate healthy cash flow from operations. Of course, the business struggled after the pandemic's onset, as the chart above shows, but its cash flow from operations bounced higher than ever in 2021. 

2. Massive addressable market 

Despite Airbnb's improving prospects, it has plenty of room to rise. According to Statista, folks spent over $1.5 trillion on hotels and resorts in 2019. That figure crashed in 2020 as governments implemented travel restrictions and people became hesitant to leave their homes. Statista estimates the industry could rebound to $1 trillion in 2022.

Still, that would leave overall spending on this category hundreds of billions below the level before the outbreak. So not only is Airbnb serving a massive addressable market, the market is poised to expand over the next several years. 

3. More selection for travelers

Due to its business model, Airbnb can offer more choices to customers. If all else is equal, people prefer having more alternatives. It increases the chances that a potential traveler finds a place that fits. A family of four taking a two-week vacation desires a vastly different place to stay compared to a single person taking a weekday one-night business trip. Hotels, for the most part, offer one-size-fits-all solutions. 

That's where Airbnb comes in to fill the gap in the market. On its platform, folks can reserve a home in the suburbs for two weeks or a room in an apartment for two nights. Travelers have voted in favor of Airbnb's business, driving its revenue from $2.6 billion in 2017 to $6 billion in 2021.

Recession on the horizon 

One reason to hesitate before buying Airbnb stock is the potential for an economic recession in many parts of the world. The coronavirus pandemic has created supply shortages, leading to elevated inflation. Consumers paying higher prices for essentials like food, rent, and fuel will have less money available for travel. Moreover, the Russian invasion of Ukraine has worsened a lousy situation, threatening a deeper European recession. 

Chart showing Airbnb's price to free cash flow dropping sharply in mid-2021, with slight recent rebound.

ABNB Price to Free Cash Flow data by YCharts

As the chart shows above, Airbnb's stock is down considerably off its highs. It's trading at a price to free cash flow (P/FCF) of 49, near the lowest it has sold for in recent years. The P/FCF measures the amount investors are willing to pay per dollar of a company's free cash flow. This figure typically rises if the company's prospects improve, as in Airbnb's case. But the risk of recession, and the broad market sell-off, have brought this price lower

So, although the risk of recession is high, it is arguably already priced into Airbnb's stock. Therefore, the reasons to buy outweigh the reason to hesitate, and investors can feel good about adding Airbnb stock to their portfolios.