Airbnb stock rocketed higher Friday after the vacation-rental booking company posted stronger-than-expected fourth quarter results and eased investor concerns about its investment plans this year.
Airbnb earned 73 cents per share on sales of $2.48 billion for its December quarter, according to a company news release late Thursday. Analysts polled by FactSet were forecasting earnings of 58 cents per share on sales of $2.42 billion for the San Francisco-based tech company.
Sales growth accelerated to 12% year over year, compared to 10% growth in the third quarter and 11% in the second quarter of 2024.
On the stock market today, Airbnb stock gained 14.5% to close at 161.42.
Airbnb Eases Margin Concerns
While Airbnb's sales guidance for the current quarter was slightly below estimates, Wedbush analyst Scott Devitt told clients that the jump in Airbnb stock reflected "greater clarity around near-term investment levels and margin expectations for 2025."
Coming into the report, investors were debating how Airbnb's margins could take a hit from the company's plan to scale new business, such as bookings for events and other experiences.
Airbnb said in its investor letter that it will spend between $200 million and $250 million to launch new businesses this year. But the company added that its expects to maintain at least 34.5% adjusted margins for the year, which Devitt said was ahead of expectations.
"We think the overhang on shares regarding near-term margin uncertainty has been alleviated and the debate this year will shift towards accelerating room night growth, as well as the timeline and contribution from upcoming product launches," Devitt wrote. He rates Airbnb as outperform.
Airbnb Chief Executive Brian Chesky told analysts that the company is focused on launching new businesses "adjacent to travel" that will sit within the Airbnb app.
"We want the Airbnb app kind of similar to Amazon to be one place to go for all of your traveling and living needs," Chesky said. "A place to stay is just really, frankly, a very small part of the overall equation."
Airbnb Stock: First-Time Bookings Accelerate
Meanwhile, Airbnb said demand was strong to close out 2024.
Airbnb saw a "notable acceleration in the number of first-time bookers on our platform," the company said in its Q4 investor letter. "Globally, we saw an acceleration in growth across all regions, with Asia Pacific and Latin America again leading the way."
Gross bookings on Airbnb's platform grew 13% to $17.6 billion. Analysts were looking for $17.2 billion, according to FactSet.
Airbnb also swung back to a profit from a loss of 55 cents per share in Q4 2023, which included large nonrecurring tax-related expenses.
Airbnb Stock Hits Three Month High
With Friday's gain, Airbnb stock gapped up to its highest levels since November, jumping past a potential 148.64 entry in a three month consolidation pattern.
Meanwhile, Airbnb stock has an IBD Composite Rating of 65 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Airbnb's IBD Relative Strength Rating is 63 out of 99. The RS Rating means Airbnb has outperformed 63% of all stocks in IBD's database over the past year.
