Airbnb (ABNB) shares plunged Wednesday. The company expects lower bookings and average daily rates this quarter compared to last year.
Airbnb CFO David Stephenson said on the company’s earnings call: Stephenson’s comments come after the company reported better-than-expected first quarter results.
Airbnb’s stock closed down nearly 11% on Wednesday after its biggest one-day drop since 2020, according to Bloomberg data.
Here are some notable numbers from the company’s earnings report, compared to Wall Street estimates compiled by Bloomberg:
Earnings: Estimated $1.79 billion vs. actual $1.8 billion
EPS: Estimated 12 cents vs. 18 cents
Booked stays and experiences: 121.1 million actual, 122.4 million estimated
Second Quarter Earnings Guidance: $2.35 billion to $2.45 billion actual vs. $2.42 billion estimate
Airbnb also announced a new $2.5 billion share buyback.
Airbnb CEO Brian Chesky said in a phone call that the company’s most price-sensitive customers are in North America, particularly the United States.
“The lowest-priced properties have the highest occupancy rates,” Mr. Chesky said on the earnings call. “Yes, people want low-priced listings, and we expect Airbnb rates to continue to normalize. It will not rise rapidly to the occupancy of more listings on Airbnb.”
Wall Street analysts slashed their pricing targets after Airbnb’s 2023 outlook fell short of expectations. Jefferies equity analyst John Colantuoni has a buy rating on the stock and has lowered his price target to $140 from his $155. Colantuoni said the main concerns for Airbnb stock center around slowing growth at Nights and Experiences and efforts to cut prices to rekindle demand.
In a memo to customers, Colantuoni said, “We will continue to monitor changes in demand closely.
“The number of nights and experiences booked in Q1 2023 increased by 19% compared to a year ago. The company wrote in a letter to shareholders.
Going forward, Airbnb aims to increase its supply of hosts.
“Airbnb travel is the norm,” the letter said. “We want hosting to be just as popular. To achieve this, we are raising awareness about hosting, making it easier to get started, and providing better tools for hosts. ”
The company is also looking ahead to a critical summer travel season, with online travel demand in full force after the pandemic. Airbnb said it spent a lot of money on marketing for this summer.
“For 2023, we have accelerated the timing of our marketing spending to put more emphasis on the first half of the year compared to 2022,” the company said in a letter to shareholders. We are increasing our investment in brand marketing in the country, and we believe our spending earlier this year will help support the peak summer travel season.”
Ally Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on her Twitter. @agarfinks and LinkedIn.
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