Airbnb’s Net Income Soars 280% — Is It A Buy?

Travel’s back baby — kind’ve — judging by some recent quarterly reports, including Airbnb’s in particular, which exceeded expectations.

Nov. 5, 2021

There have been times over the past year where investing in Airbnb (NASDAQ: ABNB) seemed like a crazy idea in the middle of a pandemic.

But, less than a year out from its wildly successful IPO, things are really looking up. 

Pandemic shcmandemic, travel’s back baby

At least it seems that way if Airbnb’s Q3 earnings report last night is anything to go by. 

The hotel industry’s biggest disruptor knocked it out of the park with record revenue of $2.2 billion and earnings per share of $1.22 — or net income of $834 million, also a record and a 280% jump on the same period last year. 

Sure, vaccinations and restriction easings worldwide have given consumers and travelers a lot more freedom than we’ve had in almost two years, but a recovery — if that’s what this is — wasn’t expected to be so quick. 

The company reported 79.7 million nights and experiences booked in the third quarter and commented that success by region was massively affected by the level of COVID restrictions in place — for obvious reasons. 

However, one trend that has emerged as a big winner for Airbnb due to COVID-19 is long-term stays of 28 days or more. This remained its fastest-growing category and accounted for 20% of gross nights booked in Q3 2021, up from 14% in 2019. The adoption by many companies of flexible work policies has led to many workers opting for long-term stays abroad. 

As a native of Ireland and its famous rain, I can appreciate this line of thought. 

As we fully come out of lockdown over the coming year — fingers crossed — it’s looking increasingly likely that this hybrid workforce will remain, which is great news for Airbnb. Suddenly, its long-term option could be one of the defining bull arguments to invest. It’s certainly worth keeping an eye on.