Airbnb (ABNB) issued a modest Q1 guidance after its Q4 beat, but its shares are rising more than 14% in recent trading, reflecting the company's near-term investment plans and upbeat margin forecast for 2025, Wedbush said in a note emailed Friday.
The company expects Q1 room night growth of about 8.5% and revenue growth of 4% to 6%, both below Street estimates, due to headwinds like foreign exchange and calendar shifts, Wedbush said.
The company also plans to invest $200 million to $250 million in new business ventures through the first three quarters of the year, with revenue contributions expected by late 2025, according to the note. Airbnb's management also expects adjusted earnings before interest, taxes, depreciation and amortization margin of at least 34.5% for 2025, exceeding investor expectations and Wedbush's initial estimate by about 100 basis points.
"We think the overhang on shares regarding near-term margin uncertainty has been alleviated and the debate this year will shift towards accelerating room night growth, as well as the timeline and contribution from upcoming product launches," analysts said in the note.
Wedbush reiterated its outperform rating on Airbnb and raised its price target to $175 from $155.
Price: 161.93, Change: +20.89, Percent Change: +14.81
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