Airbnb Stock Tumbles After Earnings Miss, U.S. Travel Demand Warning

Airbnb (ABNB) stock tanked late Tuesday after the vacation rental booking company reported mixed second-quarter results, with earnings coming in light. The company also warned that it is seeing slowing demand in the U.S.

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Airbnb said Tuesday it earned 86 cents per share on sales of $2.75 billion for its June-ended quarter. On average, analysts projected the San Francisco-based company would post earnings of 91 cents per share on sales of $2.7 billion, according to FactSet. For the same period a year earlier, Airbnb earned 98 cents per share on sales of $2.5 billion.

For the current quarter, Airbnb guided for sales of $3.7 billion at the midpoint of its range. Prior to the company posting its results, analysts were projecting Airbnb would tally $3.84 billion in sales for the September-ending quarter, according to FactSet.

Latin America and Asia Pacific continue to be “our fastest growing regions,” the company said in a letter to investors. “However, we are seeing shorter booking lead times globally and some signs of slowing demand from U.S. guests.”

On the stock market today, Airbnb stock is down 13.6% at 112.75 in recent after-hours action.

Airbnb Growth Slowing As Revenge Travel Fades

The second quarter continued a trend of decelerating bookings growth for Airbnb. The total value of all bookings through Airbnb grew 11% year over year to $21.2 billion for the three month period. That’s down from 12% booking growth in Q1, 15% growth in the final quarter of 2023 and 17% growth in September-ended third quarter of 2023.

While sounding the warning about U.S. spending, Airbnb said in its investor letter that it expects Q3 to show “a sequential moderation in the year-over-year growth of Nights and Experiences Booked relative to Q2.”

Airbnb’s outlook comes just days after a weaker-than-expected U.S. jobs report stoked investor concerns about an economic slowdown and roiled the markets. Airbnb’s commentary will “likely only further stoke the soft consumer thesis adopted by many market participants at this point,” RBC analyst Brad Erickson said in a client note late Tuesday.

In 2022 and 2023, Airbnb, Booking and Expedia Group (EXPE) benefited from a bounce-back in travel after Covid-19 prevented many types of travel in 2020 and into 2021. So-called revenge travel powered strong sales growth for the companies. But the picture appears to be shifting.

Last week, Booking Holdings (BKNG) reported slower-than-expected growth in room nights booked. The company said it was seeing softness in European travel. Expedia will report results Thursday.

Airbnb Stock: Struggling In 2024

Prior to earnings, Airbnb gained 4% in regular Tuesday trading. Shares are down 4% year to date and off 7% from 12 months ago. Airbnb got off to a strong start in 2024, gaining 20% in the first three months. But the stock has struggled since its first quarter earnings report, which included a weaker-than-expected sales forecast.

Coming into the report, Airbnb stock had an IBD Composite Rating of 53 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.

Further, Airbnb’s IBD Relative Strength Rating was 22 out of 99. The RS Rating means that Airbnb has outperformed only 21% of all stocks in IBD’s database over the past year.

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