Airbnb is over valued due to optimistic view on the recovery of the pandemic and is held back by the need for hosts which can favor their competitors in the future.
Airbnb, Inc. is expected* to report earnings on 05/13/2021 after market close. The report will be for the fiscal Quarter ending Mar 2021. According to Zacks Investment Research, based on 12 analysts' forecasts, the consensus EPS forecast for the quarter is $-1.15.
The S-1 registration statement filed by the SEC, gave a list of risk factors for Airbnb Inc. These risks mainly concerned Covid 19, and how/if the company will bounce back from the pandemic. The report has concerns on revenue growth," Our revenue growth rate has slowed, and we expect it to continue to slow in the future."(P30, S-1 report), retaining hosts,adding existing hosts, and any further decline in restrictions and public health guidlines. So they are relying heavily on the vaccines coming out and their efficiency.
Another concern/risk of the stock was with its competitors; sites like, Expedia(EXPE), Tripadvisor (TRIP), and hotels such as Marriot International (MAR). "Many of our current and potential competitors enjoy substantial competitive advantages over us, such as greater name and brand recognition, longer operating histories, larger marketing budgets, and loyalty programs, as well as substantially greater financial, technical, and other resources. In addition, our current or potential competitors have access to larger user bases and/or inventory for accommodations, and may provide multiple travel products, including flights."(P35 S-1 report).
There is also concern in the Adjusted EBITD, and free cash flow that that are declining and could continue to decline. They incurred net losses of $70.0 million, $16.9 million, $674.3 million, and $696.9 million for the years ended December 31, 2017, 2018, and 2019 and the nine months ended September 30, 2020, respectivel.
Airbnb has gotten more critics in this pandemic, its use of short term stays are restricted as seen in Ottawa Canada, https://globalnews.ca/news/7817628/ottawa-airbnb-short-term-rental-rules/ . "Airbnb or a similar short-term rental platform will now need a permit from the city and must follow a stricter set of guidelines after council approved a new bylaw regulating the industry... The bylaw is part of a three-year pilot, which could see the rules revised at the end of that period.".
Forbes also gave its influence on consumers, recognizing the growth and popularity of the company but still labeling it as an expensive stock. " While we think that the long-term outlook for Airbnb is compelling, given the company’s strong growth rates and the fact that its brand is synonymous with vacation rentals, the stock is expensive in our view. Even post the recent correction, the company is valued at over $113 billion, or about 24x consensus 2021 revenues. Airbnb’s sales are likely to grow by about 40% this year and by about 35% next year, per consensus estimates." https://www.forbes.com/sites/greatspeculations/2021/04/07/why-airbnb-stock-isnt-the-best-travel-recovery-play/?sh=64b169a88b6b
The CEO Brian Chesky, "To meet the demand over the coming years, we're going to need millions more hosts," he told CNBC on Friday April 16th. These hosts may be harder to aquire post pandemic, and with competitors, old and new who can also meet that demand.