It’s Too Early to Buy The Dip in Airbnb Stock
The stock of Airbnb has been negatively impacted by a perfect storm of rising rates, economic fears, unfavourable press due to anecdotal experiences, and increased competition in the alternative-stay market. The industry leader in alternative lodging has been under pressure for almost two years, and without any significant catalysts in the works, Airbnb stock may find it difficult to turn the tide and sustain a climb back to 2021’s highs.
Furthermore, as macro headwinds become more intense, the previously mentioned unfavourable points could potentially get worse. Given that the stock is currently trading well above £90, I am mildly pessimistic on ABNB.
Post-Recession Environment
Like most early adopters in an industry, Airbnb has a significant moat around its portion of the market for alternative lodging. It appeared for a moment that the company’s network and brand were so powerful that they deserved their own word.
The large chains have sufficient financial resources to potentially stifle their disruptors. Though it will be very challenging for Airbnb’s more powerful competitors to level the playing field, one would hope that their continuing progress would erode Airbnb’s protective barrier.
A new brief report on negative customer experiences with Airbnb could worsen the situation and give competitors an opportunity to steal some of Airbnb’s customers.
Airbnb Stock Declines After Short Report
Recent news of a research documenting unfavourable customer experiences caused shares of Airbnb to drop as much as 6.6%. These issues include last-minute cancellations, dubious cleaning standards, and improper usage of covert cameras.
Almost anyone would be scared enough by any of these worries to choose the more expensive hotel than an Airbnb. Always keep in mind that short-sellers have their own objectives and can exaggerate dangers or prevalence.
There is no doubt that last-minute cancellations can seriously interfere with vacation plans. They can significantly increase prices and add a great deal of stress to any peaceful trip.
And Airbnb is doing well in that regard. The corporation increased the maximum fine for last-minute cancellations from £90 to £900 in August of last year.
It’s challenging to surpass the certainty offered by hotels in terms of stays. If you reserve a room, there is a good chance that your plans won’t be drastically changed by a cancellation. Itt appears that Airbnb is actively addressing one of the greatest drawbacks of non-traditional lodging.
The business has a chance to apply artificial intelligence to assist it resolve any disputes between guests and hosts.
Should I Buy ABNB Stock?
Wall Street rates the ABNB shares as a Moderate Buy. There are three sells, 15 buys, and 14 holds among the 32 analyst ratings. The average price objective for Airbnb stock is £125, suggesting a potential gain of 23.6%. Analysts have set price goals for the stock that range from £82 per share to £155 per share.
The Final Verdict on Airbnb Stock
After a difficult 2022 for the IT industry, Airbnb stock fell to fresh record lows of about £75 per share.