Shares of online accommodations platform Airbnb (NASDAQ: ABNB) fell 10.6% in the afternoon session after the company reported first quarter results that beat analysts' gross bookings, revenue, earnings per share (EPS), and free cash flow estimates. However, room nights, revenue and adjusted EBITDA guidance for the next quarter came in below Consensus, with the weak EBITDA guidance attributed to "changes in the expected timing of marketing spend relative to the prior year." Additionally, full-year 2023 EBITDA margin will be similar to 2022, which is slightly below expectations and shows that the company will not be getting operating leverage on expenses this year. Overall, it was a negative quarter for the company given the outlook for the business.
What is the market telling us:
Airbnb's shares are quite volatile and over the last year have had 35 moves greater than 5%. But moves this big are very rare even for Airbnb and that is indicating to us that this news had a significant impact on the market's perception of the business.
Airbnb is up 28.8% since the beginning of the year, but at $109.34 per share it is still trading 21.6% below its 52-week high of $139.42 from February 2023. Investors who bought $1,000 worth of Airbnb's shares at the IPO in December 2020 would now be looking at an investment worth $755.55.
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