Shares of Airbnb (ABNB -0.79%) are up 32% year to date. Despite the stock's tumble during the market's retreat last year, the rental platform continued to report strong growth, and the company's strong fourth-quarter earnings results points to more growth this year. 

With the total value of bookings on the platform reaching $63 billion last year, Airbnb has grown into a large business with wide brand recognition. But its long-term opportunity still dwarfs its current size, and could still deliver satisfying returns to investors. Here's why.

Near-term catalysts

Airbnb's revenue growth has been resilient over the last year, with full-year revenue up 40%. While growth started to decelerate toward the end of the year, coming in at 24% year over year in the fourth quarter, management reported strong demand entering the first quarter. As CEO Brian Chesky said during the fourth-quarter earnings call:

We had our highest number of active bookers ever in Q4, demonstrating guest excitement of travel on Airbnb despite evolving economic uncertainties. During the quarter, we also continued to see guest booking trips further advance supporting a strong backlog for Q1.

The pandemic accelerated the trends toward alternative accommodations. In fact, Airbnb could be growing a lot faster right now if the global economy were on a stronger footing. China still hasn't recovered, but should see a gradual recovery over the next few years. 

Other areas around the world are in the middle of what could be a strong recovery. Management noted that Europeans were booking summer trips much earlier than usual. A recovery in China and Europe in the second half of 2023 would be a strong catalyst for Airbnb's international business, which made up 54% of total revenue last year. 

A strong business

The main factor that caused Airbnb's stock to fall last year was valuation. On a price-to-sales basis, the stock was trading at over 30 times revenue in 2021, which is asking a lot of the company's growth to support that premium. It now trades at a more attractive 9 times revenue, which is still expensive, but not if Airbnb can continue to deliver an improving profit margin and robust revenue growth.

ABNB PS Ratio Chart

Data by YCharts

Airbnb still has a tremendous long-term growth opportunity. One estimate from Grand View Research has the global alternative accommodation market growing 16.5% per year through 2030, which should support top-line momentum. 

Another reason to like Airbnb is that it has a very profitable business model. Strong guest demand has driven higher average daily rates, which is why revenue has been growing faster than total nights and experiences booked. Moreover, Airbnb doesn't have to spend capital on maintaining land and buildings, but instead generates revenue from charging service fees.

This helped Airbnb report a net profit of $1.9 billion on $8.4 billion of revenue last year. That's a healthy profit margin of 22% -- double the corporate average and that of top hotel operators.

ABNB Profit Margin Chart

Data by YCharts

More travelers are looking for unique places to stay more than ever. This plays to Airbnb's strengths and growing supply of listings, which should serve as a positive flywheel for more growth. A vast number of unique listings on the platform should naturally attract more guests, and therefore more hosts who want to list their properties where all the action is.

Airbnb is flying above the competition

The greatest risk for Airbnb is increasing competition from large hotel chains. Marriott International offers home rentals through Homes and Villas by Marriott Bonvoy, where it can leverage over 177 million members in the Bonvoy loyalty program. But Airbnb's superior growth shows it has already cemented its brand as the go-to home rental platform, and it also has the advantage of reinvesting all its profit into new features and technology.

ABNB Revenue (Quarterly) Chart

Data by YCharts

It's impressive that Airbnb's fourth-quarter revenue was 72% higher than the same quarter in 2019, far outpacing a 10% cumulative increase for Marriott and 24% for Hyatt

Given these opportunities and competitive advantages, I believe Airbnb is worth buying after last year's sell-off. Investors have a good chance of earning a market-beating return over the long term.