Why Airbnb (ABNB) Shares Are Getting Obliterated Today

What Happened:

Shares of online accommodations platform Airbnb (NASDAQ:ABNB) fell 9.5% in the morning session after the company reported first-quarter results. It provided revenue guidance for the next quarter below analysts' expectations, and its revenue growth slowed. On the other hand, Airbnb beat analysts' revenue and adjusted EBITDA expectations. It also expanded its number of bookings. Overall, this was a mixed quarter for Airbnb.

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What is the market telling us:

Airbnb's shares are very volatile and over the last year have had 11 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 12 months ago, when the company dropped 10.6% on the news that the company reported first quarter results that beat analysts' gross bookings, revenue, earnings per share (EPS), and free cash flow estimates. However, room nights, revenue and adjusted EBITDA guidance for the next quarter came in below Consensus, with the weak EBITDA guidance attributed to "changes in the expected timing of marketing spend relative to the prior year."

Additionally, full-year 2023 EBITDA margin will be similar to 2022, which is slightly below expectations and shows that the company will not be getting operating leverage on expenses this year. Overall, it was a negative quarter for the company given the outlook for the business.

Airbnb is up 9.5% since the beginning of the year, but at $147.26 per share it is still trading 12.4% below its 52-week high of $168.18 from March 2024. Investors who bought $1,000 worth of Airbnb's shares at the IPO in December 2020 would now be looking at an investment worth $1,018.

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