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January 24, 2021 | Top Picks | Ticker: ABNB

PE Ratio:  ----

Beta: -1.64

Market Cap: $107 B

EPS:   -$1.13

Airbnb, Inc. (NASDAQ: ABNB) engages in the management and operation of connecting hosts and guests online or through mobile devices to book spaces, predominately short-term residential rentals. The company went public in December 2020, and it's a Silicon Valley darling. 


While hotels struggle during the pandemic, Airbnb has actually performed well. The stock is up about 30% between the summer 2020 months and January 2021. The American population, through shelter-in-place restrictions, seemed to jump on Airbnb's as an opportunity to lockdown in vacation rentals. 


Hotels, generally, have become less popular with the travel set as Airbnb hosts provide the comforts of home but at a travel destination. From business travel to the beach to the country to the city, Airbnb has become the go-to short-stay housing for people under the age of 55. While it's true cities have restricted Airbnb hosts to protect hotels to some degree, these urban areas will ultimately have to get on board - see Uber versus taxi cabs as an example.


And the market is massive as $38 billion transacted through their platform in 2020 generating $3.6 billion in revenue. We see no limits on the company's top-line growth as more markets open, the economy gets back on track, and their dominant position extends.  Hosts are sticky on the platform because it works and there's no reason to change. In 2019, 69% of revenue came from repeat customers. Loyalty on both sides of the marketplace. Airbnb has room to run.

- SG

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