The times have not been good for Airbnb (ABNB). First, we had a COVID-19 pandemic, and now the threats of war and an energy crisis. Consequently, travel and Airbnb’s rental business could soon face another collapse.
Yet, the financial data shows Airbnb Inc. (NASDAQ: ABNB) grew in 2021. For example, Airbnb’s quarterly revenues grew from $859.26 million on 31 December 2020 to $1.532 billion on 31 December 2021.
Additionally, Airbnb’s quarterly gross profit grew from $649.52 million on 31 December 2020 to $1.237 billion on 31 December 2021. In contrast, the quarterly operating income rose from -$3.1 billion on 31 December 2020 to $75.57 million on 31 December 2021.
Thus, Airbnb is growing and making money despite COVID-19, so it is pandemic resistant. Unfortunately, we cannot tell if Airbnb is war and energy crisis resistant.
Is Airbnb still growing?
Interestingly, data shows Airbnb (NASDAQ: ABNB) is still a growing company in rough times.
For example, Airbnb’s platform had 41.3 million US users in 2019, Statista estimates. That number grew to 43.3 million users in 2020 an 44.5 million in 2021. Furthermore, Statista forecasts Airbnb’s US user base will grow to 45.6 million in 2022.
In contrast, The Zebra estimates Airbnb had 5.6 million active listings in almost 100,000 cities and over 220 countries and regions worldwide in February 2022. Additionally, The Zebra estimates over 150 million people have used Airbnb.
In addition, Property Management estimates Airbnb had over four million active hosts in 2021. The average Airbnb host made $9,600 a year from her listings in 2021, Property Management claims. Property Management claims users have booked over one billion stays.
Will Airbnb’s Growth Continue?
I think COVID-19 drove Airbnb’s growth. To explain, many people wanted to avoid hotels and contact with guests and staff during the pandemic. Hence, Airbnb bookings could fall as people’s fear of COVID-19 declines.
Hence, fate could hit Airbnb with a one-two punch. First, Airbnb’s could fall as some people return to hotels. Remember, there’s no more reason to fear the room service person or the bartender. Thus, hotel amenities will be more attractive.
Second, travel could fall if the Ukraine crisis leads to a broader war or triggers an energy crisis. I think the Ukraine War could trigger an energy crisis by taking Russian oil and gas out of the global markets.
How Much Cash is Airbnb Generating?
Value investors are interested in Airbnb (ABNB) because financial data shows its platform can generate enormous amounts of cash.
For example, there was a $380.85 million quarterly operating cash flow on 31 December 2021. The quarterly operating cash flow fell from $791.30 million on 30 June 2021 and rose from -$139.11 million on 31 December 2020.
Similarly, Airbnb reported a quarterly ending cash flow of $8.486 billion on 31 March 2021. The quarterly ending cash flow fell to $3.467 billion on 30 June 2021, -$2,079 billion on 30 September 2021, and -$145.93 million on 31 December 2021.
How Much Debt is Airbnb accumulating?
Unfortunately, Airbnb borrowed enormous amounts of money to achieve that cash flow.
For example, Airbnb reported a $1.767 billion quarterly financing cash flow on 31 December 2021. The quarterly financing cash flow fell to $1.568 billion on 31 March 2021. The quarterly financing cash flow grew to $2.334 billion on 30 June 2021.
Appealingly, Airbnb is paying that debt. Airbnb reported quarterly financing cash flows of -$2.323 billion on 30 September 2021 and -$146.49 million on 31 December 2021. Consequently, Airbnb’s total debt grew from $1.883 billion on 31 December 2020 to $2.046 billion on 31 December 2021.
What Value Does Airbnb Offer?
Airbnb (ABNB) is a cash-rich company. For example, Airbnb had $6.425 billion in cash and short-term investments on 31 December 2020. Appealingly, the cash and short-term investments grew to $8.337 billion on 31 December 2021.
Furthermore, Airbnb’s value is growing. For instance, Airbnb’s Total Assets grew from $10.492 billion on 31 December 2020 to $13.708 billion on 31 December 2021.
Yet Mr. Market gives Airbnb less value. For example, Airbnb’s share price fell from $179.81 on 5 March 2021 to $145.14 million on 11 March 2022.
Is Airbnb a Value Investment?
I consider Airbnb (ABNB) a potential value investment because it generates cash from a growing platform. Yet its stock price is falling.
Importantly, Airbnb has shown it can grow and make money in the worst of times. Hence, I consider Airbnb a decent tech investment. I do not Airbnb will ever generate enormous amounts of cash as platforms such as Amazon (AMZN) can. Yet I think Airbnb will survive and make money.
If you are seeking a cheaper growing tech company, that could become a value investment. I think Airbnb is worth investigating.
Originally published at https://marketmadhouse.com on March 11, 2022.