With the fading of the coronavirus pandemic, people around the world emerged from their lockdowns and social-distancing bubbles to start traveling again. Demand in the travel industry has been strong, benefiting companies throughout the sector, particularly the original large-scale DIY accommodation service Airbnb(NASDAQ: ABNB).
With shares up over 90% since the beginning of 2023, some might think the company's stock has flown too high. Susquehanna analyst Shyam Patil isn't one of them. Last month, he maintained his positive (read: buy) recommendation on the specialty travel company's shares while raising his price target from $160 to $180. That isn't too far above the shares' current level, so reaching it is a real possibility in the near term.
2023 was a good year for Airbnb
Patil's update came closely on the heels of Airbnb's fourth quarter and full-year 2023 earnings release. Many significant financial and operational metrics for the company rose on an annual basis. These included revenue (up 18%), free cash flow (up 12%), nights and experiences booked (up 14%), and active listings (up 18%).
In his note, Patil pointed out that he and his colleagues "continue to like ABNB given its strong positioning, promising long-term opportunity, and profitability improvements."
Encouraging revenue guidance for the first quarter
Management offered guidance for the first quarter in its earnings release; one of the figures that jumped out was its top-line projection. The company expects to post revenue of $2.03 billion to $2.07 billion, representing year-over-year growth of at least 12%.
With that anticipated double-digit rise, other key fundamentals are sure to follow. Patil's new price target is not only attainable, but the stock could exceed it before long.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb. The Motley Fool has a disclosure policy.
