Airbnb, Inc. ([ABNB:NASDAQ](https://site.financialmodelingprep.com/financial-summary/ABNB)) encountered a significant challenge as its stock plunged over 8% in extended trading on Wednesday, following the release of a weaker-than-expected outlook for the current quarter. This decline came despite the company exceeding analysts’ forecasts for first-quarter earnings and revenue. Airbnb’s guidance for the quarter ending in June, which anticipates net sales between $2.68 billion and $2.74 billion, indicates an 8% to 10% year-over-year growth. However, this projection fell short of Wall Street’s expectations, which were set at $2.74 billion. The immediate market reaction was reflected in the company’s stock price, which stood at $157.9 after a 1.20% drop, showcasing the investor sentiment towards Airbnb’s financial health and market capitalization of approximately $101.77 billion, with a trading volume of 5.71 million shares.
The subdued forecast from Airbnb was attributed to various factors, including the timing of Easter, an extra leap-year day in the previous quarter, and the impact of foreign exchange fluctuations. Despite these hurdles, Airbnb remains optimistic about an acceleration in revenue growth between the second and third quarters, driven by a backlog of summer travel and the expected boost from the Paris Olympics in July and August. This optimism is supported by the company’s strong performance in the first quarter, where it reported adjusted earnings of 41 cents per share, significantly beating the 24 cents per share anticipated by analysts. Moreover, the company’s revenue for the quarter was $2.14 billion, an 18% increase from the previous year, exceeding the consensus estimate of $2.06 billion.
Airbnb’s success in the first quarter was further underscored by a notable increase in profit, with net income more than doubling to $264 million from $117 million a year earlier. This profit growth was bolstered by an 18% rise in revenue, reaching $2.14 billion. Gross bookings for the quarter amounted to $22.9 billion, up 12% year-over-year, while nights and experiences booked increased by 9.5% to 132.6 million, slightly surpassing expectations. Unique events, such as the solar eclipse in North America, contributed to enhancing user engagement and bookings during the quarter. Despite these positive trends, the stock’s post-earnings decline and the disappointing revenue forecast for the second quarter have prompted investor caution.
Investors are now encouraged to closely monitor Airbnb’s stock performance, particularly in the support zone between $141 and $148, as indicated by the 200-day moving average and historical price action. A breach below this critical support level could lead to further declines, potentially reaching around $126. Despite the post-earnings dip, it is important to recognize that Airbnb’s shares had previously appreciated by about 25% over the past 12 months, demonstrating a strong overall market performance. The company’s ability to overcome challenges related to exchange rates and holiday timings, along with its strategic focus on forthcoming events like the Paris Olympics, will be key in shaping its financial outlook in the upcoming quarters.
