Airbnb has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 7.7% to $132.49 per share while the index has gained 3.1%.
Is ABNB a buy right now? Find out in our full research report, it’s free.
Why Are We Positive On Airbnb?
Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ: ABNB) is the world’s largest online marketplace for lodging, primarily homestays.
1. Nights and Experiences Booked Drive Additional Growth Opportunities
As an online travel company, Airbnb generates revenue growth by increasing both the number of stays (or experiences) booked and the commission charged on those bookings.
Over the last two years, Airbnb’s nights and experiences booked, a key performance metric for the company, increased by 9.1% annually to 121.9 million in the latest quarter. This growth rate is solid for a consumer internet business and indicates people are excited about its offerings. 
2. EBITDA Margin Reveals a Well-Run Organization
Investors regularly analyze operating income to understand a company’s profitability. Similarly, EBITDA is a common profitability metric for consumer internet companies because it excludes various one-time or non-cash expenses, offering a better perspective of the business’s profit potential.
Airbnb’s EBITDA margin has more or less stayed the same over the last 12 months , averaging 35.7% over the last two years. This profitability was elite for a consumer internet business thanks to its efficient cost structure and economies of scale. This result isn’t surprising as its high gross margin gives it a favorable starting point.
3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Airbnb has shown terrific cash profitability, driven by its lucrative business model and cost-effective customer acquisition strategy that enable it to stay ahead of the competition through investments in new products rather than sales and marketing. The company’s free cash flow margin was among the best in the consumer internet sector, averaging an eye-popping 39% over the last two years.
Final Judgment
These are just a few reasons why we think Airbnb is a high-quality business, but at $132.49 per share (or 15.2× forward EV/EBITDA), is now the right time to buy the stock? See for yourself in our in-depth research report, it’s free.
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