Airbnb Inc (NASDAQ: ABNB) has had a rather challenging 2022 and unfortunately, next year is unlikely to be a good one either – that’s according to a Morgan Stanley analyst.
Airbnb stock will continue to sink
Brian Nowak downgraded the vacation rental company this morning to “underweight” and said shares could sink further to $80 – down another 15% from here.
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He’s convinced that growth will slowdown from here on out as Airbnb continues to mature as a business.
Airbnb’s required forward supply has been a key debate since IPO and our new supply and occupancy deep dive speaks to budding growth headwinds.
From 2018 to 2022, the Nasdaq-listed firm has increased listings at roughly 12%. But the Morgan Stanley analyst expects that growth to sit at 7.0% or less through 2025. For the year, Airbnb stock is down 50% at writing.
Nowak laid out a bear case as well
Nowak also proposed a “bear case” that sees the stock crashing further to $60 a share. More alarmingly, he says there’s an above average risk of that playing out since that valuation is based only on a comparable multiple to peers like Booking Holdings. The note reads:
Our model for decelerating supply speaks to how it’s increasingly important for Airbnb to drive demand growth through higher occupancy and/or more nights available per listing.
The analyst is dovish on the Airbnb stock also because he disagrees with the consensus that occupancy rate will hit 44% by 2025. He’s now calling for an 8.0% growth in EBITDA next year and 14% in 2024.
Last month, Airbnb reported a strong Q3 but lowered guidance for the fourth quarter.
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