What happened
Shares of Airbnb (ABNB 0.60%) were moving higher last month after the home-sharing platform beat estimates in its fourth-quarter earnings report and offered solid guidance for 2023.
After the stock soared on the report, it gave back some of those gains in the second half of February as investors responded to data that showed that inflation was still elevated, meaning the Federal Reserve was likely to continue raising interest rates.
According to data from S&P Global Market Intelligence, the stock finished the month up 11%, as the chart shows.
So what
There wasn't much company-specific news out on Airbnb aside from the earnings report, but the company's fourth-quarter results made it clear that the company is executing well and delivering solid growth in spite of the inflationary and recessionary economic climate.
Airbnb shares rose 13% on Feb. 15 after the fourth-quarter results came out.
Revenue in the quarter increased 24% to $1.9 billion, topping the consensus at $1.86 billion. Gross booking value rose 20% to $13.5 billion, and nights and experiences booked were up 20% to 88.2 million.
As in prior quarters, Airbnb continued to demonstrate significant gains in leverage, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumping from $333 million to $574 million, and net income surging from $55 million to $319 million. That translated into earnings per share of $0.48, up from just $0.08 in the quarter a year ago and better than the analyst consensus at just $0.25.
Wall Street generally cheered the update, with several analysts raising their price targets and reaffirming their buy ratings on the stock.
Now what
In its guidance for the first quarter, the company said it continued to see strong demand including European guests booking summer travel earlier in the year, market share gains in Latin America, and an ongoing recovery in the Asia-Pacific region.
For the first quarter, it expects revenue of $1.75 billion to $1.82 billion, up 16% to 21% from the quarter a year ago and better than estimates at $1.69 billion.
On the bottom line, the company said it expects to maintain its adjusted EBITDA margin for the full year, but for it to be down slightly in the first quarter due to increased marketing spending.
Airbnb's travel peers also reported strong fourth quarters and offered bullish guidance, showing that the travel sector remains resilient as it recovers from the pandemic.
That and its powerful high-margin business model should bode well for Airbnb in 2023.
