Airbnb (ABNB) could see stronger long-term growth from improvements to its main platform, expanding hotel bookings, new services and wider use of AI, while healthy travel demand should also support revenue and margins, Wedbush Securities said in a note Friday.
Airbnb's initiatives, including Reserve Now, Pay Later, a single service fee, and improvements to search, pricing and booking process should continue to lift bookings, while hotels could become an important new growth area, as early bookings have exceeded expectations and hotel nights are growing much faster than bookings for Airbnb homes, the brokerage said.
New services, such as car rentals, airport pickup and luggage storage, remain small but could add to growth over time, with car rentals offering the largest opportunity, Wedbush said.
AI is also helping Airbnb launch products faster and lower costs, while new AI-based pricing and search tools could improve bookings and customer activity over time, Wedbush said, adding that strong travel spending across regions and faster growth in first-time customers, especially younger users, support its view that Airbnb can maintain stronger bookings growth.
Wedbush Securities upgraded Airbnb to outperform from neutral, and raised its price target to $200 from $152.
Shares of the company were up 15.6% in Friday trading.
Price: 175.25, Change: +23.61, Percent Change: +15.57
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