Airbnb's (ABNB) Q1 room night outlook suggests subdued growth in booking volume following "better-than-feared" Q4 results, while its investment efforts this year are considered a positive factor, RBC Capital Markets said in a note emailed Friday.
The company said late Thursday it was expecting nights and experiences booked in Q1 to be "relatively stable" from a year earlier.
Airbnb's planned investments to back growth projects didn't drive a more meaningful margin cut as investors anticipated, RBC said.
The investments, expected to be $200 million to $250 million this year, represent a margin headwind of 150 basis points to 200 basis points, but the company's margin guidance was still in line with market expectations, according to the note.
Airbnb is "on a clear path to expand its [total addressable market] beyond core stays where the strength of its brand will continue to look compelling to long-term investors and reasonably supportive of the multiple," RBC said.
RBC raised Airbnb's price target to $160 from $130 and kept its sector perform rating.
Price: 161.20, Change: +20.16, Percent Change: +14.29
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