Airbnb Breakaway Gap Down Below Key Pivots

Airbnb stock did formed a breakaway gap down chart pattern on October 3, 2023, after the ABNB stock was downgraded by Keybanc.

Airbnb was downgraded by KeyBanc on October 3, 2023, from Overweight to Sector Weight, but no price target was specified. In a research note, the analyst warns investors that Airbnb’s margins have reached a near-term peak and that its revenue growth could slow to 11 percent year-over-year in 2024 as room night and average daily rate growth moderate. The new EBITDA estimates from KeyBanc for 2024 and 2025 are 8 percent and 5 percent less than those of the Street, respectively. It thinks that as Airbnb shifts from a growth to a GARP investor base, this could lead to a share price overhang.

BOTTOM-LINE: If inflation does not begin to decline more significantly, hotel chain competition may intensify. With average nightly rates of $67, ABNB recently introduced Airbnb Rooms to better compete with hotel chains on price. While the average daily rate (ADR) is rising for hotel operators like Marriott (MAR), rising 6 percent globally y/y in Q2, hotel chains offer superior privacy and amenities compared to the typical room hosted on ABNB’s platform.

Additionally, businesses like Marriott (MAR) and Hilton (HLT) do not incur the same costs as hosts on ABNB, which could cap the company’s supply and raise overall customer prices. Travelers’ overall booking costs have risen as a result of ABNB’s service fees, which have been rising steadily over the past few years. Price was one of the main advantages ABNB claimed it had over its competitors. Travelers have begun turning back to conventional lodging options, though, as the cost of booking has caught up with and, in many cases, surpassed the cost of staying at a hotel.

As inflation began to decline and travel demand picked up this year, ABNB saw a significant increase. If inflationary pressures do not continue to ease, the economic climate could deteriorate in the ensuing months, causing travelers to seek out the less expensive lodging options provided by conventional hotel chains.

The On Balance VolumeThe On Balance Volume indicator (OBV) is a technical analysis tool used to measure the flow of money into and out of a security over a specified period of time. It is a cumulative ... More indicator has formed a negative divergence to the price of ABNB which is bearish.

Airbnb is an online marketplace and hospitality service that enables people to list, find, and rent accommodations such as apartments, houses, and rooms. It allows individuals to host guests and earn money by renting out their properties for short-term stays. People can book unique and affordable accommodations in various locations around the world through the Airbnb platform. Additionally, Airbnb offers experiences and activities hosted by locals, providing travelers with a more personalized and immersive travel experience.