The unusual year of the market caused by the coronavirus pandemic kept one last milestone for History: the surprising IPO of Airbnb on Wall Street. Investors devoured the shares of the online accommodation rental platform despite having practically no business due to mobility restrictions and social distancing measures due to the health crisis and despite being persecuted by regulation in almost every city in the world.
The financial world that thinks about the new normal has a hard time trusting traditional companies again – the travel and tourism industry is dragging one of the biggest punishments on the stock markets despite the rebound due to vaccine expectations – and it gives up with ease in the face of digital and connected activity, flirting with the creation of bubbles such as those that have been noticed in recent months in companies such as the videoconferencing company Zoom.
last Thursday December 10 on the Nasdaq stock market under the ticker “ABNB” also serves as an example, but the first profit forecasts for the coming years deactivate the risk of excessive overvaluation in the medium term. Its shares rose to $146 from $68 a day earlier.
Through the sale of 51.3 million shares, the platform raised 3,490 million dollars, establishing itself as the most important IPO of 2020 in the US.
Airbnb is worth the same as Hilton, Intercontinental and Marriot hotels combined
The company led by Brian Chesky saw its shares appreciate almost 115% in its first time as a public company, surpassing a fully diluted market capitalization of more than 100,000 million dollars, more than the combined sum of the three of the major hotels in the world, Intercontinental, Hilton and Marriott. At the close, it posted a 112.81% gain to $144.71.
Since then, its titles have corrected around 15%, and, this week, analysts such as Robert Mollins, of Gordon Haskett, have already lowered their recommendation on this stock from buy to underweight, alleging the excessive valuation of the company when compared to other competitors.
This overvaluation is evident in the short term. At least until 2023, when the estimates of the experts compiled by Bloomberg already point to a net profit of 450 million dollars, and its PER (times that the profits are included in the share price) normalizes up to 30 times.
This profit multiplier is then only double the average – 15 times – of the other comparable publicly traded accommodation platforms, Booking, Expedia and Tripadvisor, although the former will achieve a net profit of almost 4,000 million dollars according to the same estimates. The average PER if added to the main hotel companies for three years from now is even closer, at 20 times.
The forecasts do not remove Airbnb from losses -in 2020 they will amount to 1,500 million dollars- until 2022, which leads Juan Carlos Ureta, executive president of Renta4, to affirm that the platform would not have attracted so much attention on the stock market “if it had not a huge mass of money that does not know where to invest and that cannot remain uninvested because interest rates are at zero or negative”.
“Airbnb is worth, for example, twice as much as the Marriott hotel chain, the first in the world,” continues the expert. “Let’s also consider that previous valuations in the last round of financing, very recently, had been well below the levels reached on its first day of trading,” he concludes.
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