What did ABNB's latest financial report say?!

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$Airbnb (ABNB.US)$ Airbnb was founded in 2008, and the darling of the sharing economy has successfully created a platform that connects travelers with landlords around the world. The company went public in December 2020 and opened at $146.

Airbnb recently achieved a record high revenue for the third quarter of 2021, up nearly 67% year over year, and performance even surpassed the pandemic level, up 36% from the same period in 2019. Continued revenue growth was mainly due to continued strong business performance in North America, Europe, and Latin America, as well as an increase in average nightly room prices.

On the other hand, net profit increased significantly compared to the same period in 2020 and 2019. Net profit increased by 280% compared to the same period last year, while compared to the same period in 2019, it increased by 213%, and net interest rate reached 37%. The record net profit performance was mainly due to effective cost control and significant revenue growth. It is worth mentioning that this is also the first time that the Group has achieved a profit of 1 billion dollars in adjusted profit before tax, interest, depreciation and amortization, an increase of 2.5 times over the same period in 2019. This shows the strong recovery in Airbnb's revenue and significant improvements in the cost structure.

There are several important pieces of information in this financial report. First, people's travel and lifestyle continued to change after the pandemic. Even if some pre-pandemic travel methods resume, many emerging booking trends will continue, including lodging in non-popular travel destinations and long-term stays, and people now enjoy more freedom when it comes to travel.

Second, as vaccination efforts advance and travel bans are relaxed, more travelers are starting their journey again. Countries with high vaccination rates, such as the US and some European countries, are at the forefront of tourism recovery. Travellers have begun to restart cross-border travel and urban travel. In particular, cross-border travel in October this year has recovered to 80% of the same period in 2019.

Third, the average nightly room rate continued to rise. In the third quarter of this year, the average nightly room rate reached 149 US dollars per day, an increase of 15% over the same period last year, mainly because consumers prefer long-term stays and reservations for entire buildings. In particular, bookings in non-urban areas can see significant changes. In addition, more tenants in non-urban areas have also begun to join the platform, and both supply and demand for housing types continue to grow.

Looking ahead, management mentioned that travel activity is continuing to recover, but there have been significant changes in the way people travel, and Airbnb's unique position will lead to a return to travel. Management expects the number of night rooms and experiences in the fourth quarter of 2021 to remain at the same level as in the fourth quarter of 2019, but the average night room price will remain high in the third quarter of 2021. As travel restrictions are lifted, Airbnb believes average nightly rates will slowly normalize. However, it is important to note that due to seasonal relationships, the third quarter is generally the strongest quarter, while the fourth quarter, regardless of revenue, will be relatively poor in terms of number of room reservations.

Regarding the performance for the next quarter, Airbnb expects fourth-quarter revenue to be between 1.39 billion and 1.48 billion dollars, still significantly exceeding the 859 million and 1.11 billion dollars in the same period in 2020, while the adjusted profit margin before tax, interest, depreciation and amortization under effective cost control will continue to increase significantly.

Although ABNB's prospects seem quite attractive, it is important to note its recent growth and new success in the local tourism sector, which has attracted strong opposition from many people. While some US cities have eased restrictions on short-term home rentals, others are tightening restrictions. Due to noise, crime, and falling real estate values, some regions oppose living close to short-term rentals. On the other hand, valuation after a price rebound is also another potential problem

Looking back at Airbnb's 2020 prospectus, management said: “In the growing travel market and experience economy, we have huge market opportunities. The total potential market is expected to reach 3.4 trillion US dollars, including a short-term accommodation market of 1.8 trillion US dollars, a long-term accommodation market of 210 billion US dollars, and an experience market of 1.4 trillion US dollars.” Compared to revenue of $4.8 billion in 2019 before the pandemic, the potential growth opportunities are certainly huge.

ABNB's current market value is about 25.5 times TTM revenue, and the comprehensive target price given by analysts is $178. Whether it's worth it depends on how you analyze it. Remember that investing is risky, and trading is at your own risk. The above information is not any trading advice!