While many technology businesses benefited greatly from the coronavirus pandemic, seeing sales and their stock prices rise, Airbnb (ABNB 1.17%) was decimated as demand plummeted thanks to travel restrictions. This makes one question the timing of the company's initial public offering, which happened in December 2020, even more.

But even though Airbnb shares are down 21% all time, the stock is up 34% so far in 2023 (as of April 25). And the business is now on much better footing, with strong momentum working in its favor. In fact, it's safe to say Airbnb is thriving right now as people have shown their propensity to move around and explore once again. 

So, where will this top travel stock be in three years? Let's take a closer look. 

The platform keeps growing 

When a company name also becomes a verb, like the status that Airbnb has achieved, it's hard to overstate the standing this has in people's minds. And just like its ride-hailing counterpart, Uber, Airbnb operates in what is arguably a winner-take-all or winner-take-most market that's characterized by network effects. 

Airbnb currently has over 4 million hosts on its platform with 1.4 billion total guest arrivals. While hosts and guests have no switching costs when it comes to using competing services, it behooves them to continue doing business with Airbnb because it has the largest network. This provides a massive customer base for hosts and a much larger number of choices for guests and travelers. This bodes well for Airbnb to continue growing in the years ahead. 

Last year, the business booked 394 million nights and experiences, up 31% from 2021. More guests and hosts can certainly push this figure much higher over time. 

And Airbnb says its service is "in almost every country across the globe." Investors might assume that this caps the growth the company can register, but this is an incorrect assumption. 

"We're in 100,000 markets, people have not heard of 100,000 places," co-founder and CEO Brian Chesky said on the Q4 2022 earnings call. "So, the name of the game is pointing demand to where we have available supply. And that's kind of a big part of our product strategy." Making it effortless for travelers to discover new places using Airbnb is the name of the game for the management team. 

Based on the factors that I just outlined, Airbnb is on its way to continuing its superb gains in the areas that matter most to its business. 

A long-term portfolio stay 

In three years' time, if Airbnb has managed to attract more hosts, more properties, and more guests, introduced new features, and booked more nights and experiences, I'd say it's virtually impossible that the company's revenues won't be significantly higher. 

In 2022, Airbnb posted revenue of $8.4 billion, up 40% year over year and a huge 75% jump from pre-pandemic 2019, when sales totaled $4.8 billion. That's tremendous growth -- all the more impressive given that during that time, the world experienced a global health crisis and is now dealing with much higher interest rates and inflation not seen in decades.

Looking ahead, Wall Street analysts expect revenue to increase at a compound annual growth rate (CAGR) of 14.7% over the next three years. That's not quite as impressive as the prior three years, but it's still a solid clip. 

Additionally, Airbnb has shown how profitable it can be when demand is robust like it was last year. Due to the pandemic, management has been focused on driving greater efficiencies. The employee headcount is actually smaller than it was three years ago. And the leadership team is now consistently worried about "having very good fixed cost discipline," as CFO Dave Stephenson highlighted on the earnings call.

This situation means that Airbnb should continue to scale well, benefiting from operating leverage. Between 2022 and 2025, diluted earnings per share are projected to rise at a CAGR of 21.2%, according to consensus analyst estimates. Seeing profit increase at a faster pace than revenue is what shareholders like to see from the companies they own. 

Better fundamental performance, as demonstrated by higher revenue and profits, should result in a stock price that is on its way up. Investors who gravitate toward growth businesses, but don't want to sacrifice the bottom line, should take a serious look at Airbnb. It might just be a stock that stays in your portfolio for three years and beyond.