Airbnb

The Airbnb stock price crashed by more than 7%, becoming one of the worst-performing technology companies in the session. The stock is trading at $131, bringing its market capitalization to more than $80 billion. The shares have dropped by more than 40% from their all-time high. 

Airbnb drops after analysts downgrade

Airbnb published relatively strong quarterly earnings on Thursday last week. The company made more than $887 million in revenue, a 5% year-on-year increase that was better than what analysts were expecting. The company recorded modest growth even as the world experienced lockdowns in the quarter. 

In fact, the recovery happened even as urban travel and cross-border travel remained under pressure. As expected, the company also nade an adjusted loss of more than $50 million.

These results were welcomed by analysts who believe that the company is positioned well to recover. In a statement, analysts at Bank of America said:

“Airbnb has strong growth prospects as Urban and then cross-border travel recovers. The company noted several positive trends that could continue post COVID, including longer stays and a growing percentage of bookings (now 24% vs 14% in 2019) for nontraditional travel.”

The company left its rating at neutral. Other analysts who were bullish on the stock were from Wedbush, who expects that the ABNB stock price will recover.

Today, the Airbnb stock price is falling after analysts at Truist Financial downgraded the stock. They lowered their stock target from $180 to $160, implying a 22% upside from the current level. 

Airbnb stock price forecast

airbnb stock price

The four-hour chart shows that the Airbnb stock price has been under pressure. This price action is mostly because of the overall sell-off in technology stocks as investors price in earlier tightening by the Fed. The stock has remained below the 25-day and 50-day moving average, implying that bears are prevailing. It is also slightly above its all-time low of $121. 

Further, the shares are below the neckline of the head and shoulders pattern at $161. Therefore, at this stage, the path of least resistance for ABNB stock is lower. Nonetheless, for patient and long-term investors, this decline is a good buying opportunity since the travel industry will ultimately recover.

When it does, Airbnb will be a key beneficiary because of its strong market share and brand recognition. This is in line with what a Seeking Alpha analyst said:

“While no one can predict what will happen to the stock market in the short- to medium-term, we believe that today’s price levels create a reasonable entry point for Airbnb stock for long-term-oriented investors.”

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