Airbnb Stock Slides as Soft Outlook Overshadows Strong Q1 Results

Shares in short-term accommodation marketplace Airbnb (ABNB) slid more than 8% in extended trading on Wednesday after the company issued a weaker-than-expected current-quarter outlook, overshadowing its first-quarter earnings and revenue that came in ahead of analysts’ expectations.

For the current quarter ending in June, the company sees net sales ranging between $2.68 billion and $2.74 billion, representing top-line growth of 8%-10% from a year earlier, with the middle portion of that forecast falling below Wall Street estimates of $2.74 billion.

The company said in its shareholder letter that its current-quarter results face “a significant sequential headwind” from the timing of Easter, an added leap-year day in the prior quarter, and the impact of foreign exchange fluctuations. However, the rentals platform sees accelerating sequential revenue growth between the second and third quarters, driven by a summer travel backlog spearheaded by the Paris Olympics in July and August.

Solar Eclipse Provided a Bookings Boost

For the three month period ending March 31, the company posted adjusted earnings of 41 cents per share, well above the 24-cents-a-share figure modeled by analysts. Revenue in the period of $2.14 billion grew 18% from the last year’s first quarter and topped the $2.06 billion consensus view.

Gross bookings registered $22.9 billion, up 12% year-over-year (YOY), while nights and experiences booked on the platform improved 9.5% from a year earlier to 132.6 million, edging past expectations of 132.1 million.

The company noted that one-off events, such as the solar eclipse in North America, helped drive user engagement to the platform in the quarter, adding that 500,000 guests booked stays during the eclipse.

Watch This Chart Area Amid Post-Earnings Weakness

Since topping out in late March, the Airbnb share price has consolidated within a narrow range around the 50-day moving average, indicating a lack of conviction from both buyers and sellers. 

Amid the company’s weaker-than-expected earnings report, investors should eye the region between $141 and $148 where the stock encounters a zone of support from the 200-day moving average and price action dating back to September last year. A failure to hold above this crucial area on the chart opens the door for a decline down to lower support around $126.

Airbnb shares fell 8.4% to $144.58 in after-hours trading. Through the close of trading Wednesday, the stock had gained about 25% over the past 12 months.

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As of the date this article was written, the author does not own any of the above securities.