Wedbush Securities upgraded Airbnb (ABNB) to Outperform from Neutral and raised its price target to $165 from $160. The investment firm urged investors to take advantage of the company's current period of relative weakness, as Airbnb's web traffic is strong amid a resurgence in consumer vacation demand.
Yahoo Finance's Seana Smith and Madison Mills analyze the latest news and discuss whether the company can translate the surge in searches into bookings.
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This post was written by Melanie Leal
Video Transcript
Now, on to Airbnb, which rose slightly this morning after President Bush raised his price target on the stock from 160 to 165 and changed his rating from neutral to outperform.
Their logic now is that investors should take advantage of the company's current period of relative weakness.
And in terms of the Air B and B situation, there was a period of relative weakness.
The upgrade comes after airbnb recorded a strong increase in web traffic throughout the quarter, with other competitors in the space turning to companies like trip.com and Norwegian suggesting that consumer demand is healthy, Bush noted.
But my question is, does Air B and B's web traffic translate into revenue?
This is a big point to note for a company like Air B and B. The company is clearly buoyed by this news, but it's certainly struggling compared to its recent growth story.
As consumers grow weary of hidden fees and move towards buying hotels, can hotels take over?
Ah, that's exactly right.
And I think this is a return to normalcy.
Certainly, we have seen a great deal of potential demand.
Over the past four years, people have enjoyed the flexibility of being able to work from anywhere.
And if you look at the news headlines that have been coming out over the last few weeks, you'll see that more and more businesses, even more banks, are mandating a return to the office.
This means that workers no longer have the flexibility, or at least the same flexibility, that they enjoyed in previous years.
I bring this up because it's something I've had many conversations with the CEO of Air BNB.
And Yahoo Finance has been one of the driving forces behind their business over the past few years.
It's the ability to work from anywhere, and people are taking advantage of it to book extended stays on Air BNB.
But more than that, this return to normalcy was made clear in Airbnb's latest, or rather lackluster, earnings report, and the company just reported that Scott DeVie at the very least sees this as a buying opportunity.
But your question above sheds light on how much of that activity this search represents.
Yes, it's strong when it comes to Airbnb.
How many of those actually lead to bookings?
Yes, we may see an uptick this quarter.
Looking ahead to the third quarter, I want to talk about some trends we may see in the travel industry.
But the question again is what does normalcy look like, and what will be the actual demand for Air BNB going forward and beyond?
The U.S. is obviously an international topic and bookings seen internationally is another focus for analysts. Are we finally seeing the end of the recovery from COVID? I think that's a great point.
And how does that impact some of these consumer names?
