Is Airbnb Stock Outperforming the Dow?

Consumer Cyclical (names A - H) - Airbnb Inc phone app by - Tada Images via Shutterstock

Based in San Francisco, California, Airbnb, Inc. (ABNB) operates a global online marketplace that connects hosts offering accommodations and experiences with guests. With a market cap of $96.1 billion, the company primarily facilitates booking private rooms, primary homes, and vacation properties.

Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Airbnb fits this criterion perfectly. Airbnb is renowned for transforming the hospitality sector by facilitating over 1.5 billion guest arrivals through a network of more than 5 million hosts globally, generating significant revenue by charging commissions on bookings across nearly every country.

However, the online accommodations platform has slipped 14.1% from its 52-week high of $170.10, achieved in March. Shares of Airbnb dipped 11.3% over the past three months, lagging behind the broader Dow Jones Industrials Average's ($DOWI) dip over the same time frame.

However, longer term, ABNB is up 7.3% on a YTD basis, overshadowing the DOWI's 2.5% gains. Moreover, shares of Airbnb have surged nearly 17% over the past 52 weeks, compared to Dow Jones' 13% returns over the same time frame.

ABNB has shown a bullish trend, consistently trading above its 200-day moving average since mid-November, while it has remained mostly above its 50-day moving average since December despite a few fluctuations.

Airbnb has outperformed over the past year due to strong momentum in booking growth, recovery in cross-border travel, expansion in urban areas, and increased demand among first-time bookers, bolstered by its diverse and unique accommodation offerings. Nevertheless, the stock dropped nearly 6.9% on May 9 following its Q1 earnings results on May 8 due to weaker-than-expected Q2 forecasts, which overshadowed the strong quarterly profit beat.

Highlighting ABNB stock's outperformance, its rival, Expedia Group, Inc. (EXPE), has plunged 18.7% on a YTD basis, while ABNB stock boasts high single-digit returns. Also, over the past 52 weeks, despite shares of Expedia having gained 11.2%, they are still lagging behind ABNB stock’s double-digit returns over the same time frame.  

Despite the stock's impressive gains over the past year, analysts are cautiously optimistic about its prospects. The stock has a consensus “Moderate Buy” rating overall from the 36 analysts covering the stock, and the mean price target of $154.55 represents a premium of just 5.8% to current levels. 

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On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.