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Wall Street JournalExploring The Competitive Space: Airbnb Versus Industry Peers In Hotels, Restaurants & Leisure
In the ever-evolving and intensely competitive business landscape, conducting a thorough company analysis is of utmost importance for investors and industry followers. In this article, we will carry out an in-depth industry comparison, assessing Airbnb (NASDAQ:ABNB) alongside its primary competitors in the Hotels, Restaurants & Leisure industry. By meticulously examining key financial metrics, market positioning, and growth prospects, we aim to offer valuable insights to investors and shed light on company's performance within the industry.
Airbnb Background
Started in 2008, Airbnb is the world's largest online alternative accommodation travel agency; it also offers booking services for boutique hotels and experiences. Airbnb's platform offered over 8 million active accommodation listings as of Dec. 31, 2024. Listings from the company's 5 million-plus hosts are spread over almost every country in the world. In 2024, 45% of revenue was from North America, 37% from Europe, the Middle East, and Africa, 9% from Latin America, and 9% from Asia-Pacific. Transaction fees for online bookings account for all its revenue.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Airbnb Inc | 31.67 | 9.37 | 7 | 16.76% | $1.62 | $3.55 | 9.73% |
| Royal Caribbean Group | 19.06 | 7.65 | 4.47 | 16.35% | $2.26 | $2.66 | 5.18% |
| Trip.com Group Ltd | 20.12 | 2.02 | 6.34 | 12.56% | $23.28 | $14.98 | 15.53% |
| Carnival Corp | 15.31 | 3.30 | 1.63 | 3.49% | $2.89 | $3.77 | -22.36% |
| Carnival PLC | 15.19 | 3.28 | 1.62 | 3.49% | $2.17 | $3.05 | -22.36% |
| Expedia Group Inc | 27.26 | 25.93 | 2.63 | 88.27% | $1.42 | $4.04 | 8.67% |
| Viking Holdings Ltd | 33.77 | 40.05 | 5.25 | 95.6% | $0.7 | $0.94 | 19.12% |
| H World Group Ltd | 28.22 | 8.70 | 4.49 | 12.22% | $2.55 | $2.9 | 8.06% |
| Norwegian Cruise Line Holdings Ltd | 16.39 | 4.73 | 1.20 | 22.29% | $1.04 | $1.38 | 4.69% |
| MakeMyTrip Ltd | 120.43 | 305.48 | 9.02 | -13.69% | $0.05 | $0.18 | 8.7% |
| Atour Lifestyle Holdings Ltd | 26.49 | 10.42 | 4.29 | 13.54% | $0.68 | $1.15 | 38.42% |
| Choice Hotels International Inc | 11.85 | 29.69 | 2.82 | 290.02% | $0.26 | $0.24 | 4.53% |
| Global Business Travel Group Inc | 752 | 2.57 | 1.42 | -4.54% | $0.03 | $0.4 | 12.9% |
| Hilton Grand Vacations Inc | 82.71 | 2.81 | 0.86 | 1.74% | $0.19 | $0.33 | -0.46% |
| Marriott Vacations Worldwide Corp | 12.88 | 0.83 | 0.49 | -0.08% | $0.08 | $0.45 | -3.22% |
| Average | 84.41 | 31.96 | 3.32 | 38.66% | $2.69 | $2.61 | 5.53% |
By closely examining Airbnb, we can identify the following trends:
The Price to Earnings ratio of 31.67 is 0.38x lower than the industry average, indicating potential undervaluation for the stock.
Considering a Price to Book ratio of 9.37, which is well below the industry average by 0.29x, the stock may be undervalued based on its book value compared to its peers.
The Price to Sales ratio of 7.0, which is 2.11x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
The company has a lower Return on Equity (ROE) of 16.76%, which is 21.9% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.62 Billion, which is 0.6x below the industry average, potentially indicating lower profitability or financial challenges.
The company has higher gross profit of $3.55 Billion, which indicates 1.36x above the industry average, indicating stronger profitability and higher earnings from its core operations.
The company's revenue growth of 9.73% is notably higher compared to the industry average of 5.53%, showcasing exceptional sales performance and strong demand for its products or services.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a key indicator of a company's financial health and its reliance on debt financing.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In light of the Debt-to-Equity ratio, a comparison between Airbnb and its top 4 peers reveals the following information:
Airbnb demonstrates a stronger financial position compared to its top 4 peers in the sector.
With a lower debt-to-equity ratio of 0.26, the company relies less on debt financing and maintains a healthier balance between debt and equity, which can be viewed positively by investors.
Key Takeaways
For Airbnb in the Hotels, Restaurants & Leisure industry, the PE and PB ratios suggest the company is undervalued compared to its peers. However, the high PS ratio indicates a premium valuation based on revenue. In terms of profitability, Airbnb's low ROE and EBITDA suggest lower returns compared to industry peers. The high gross profit and revenue growth indicate strong operational performance and potential for future growth.
This article was generated by Benzinga's automated content engine and reviewed by an editor.