Airbnb Stock Forecast: Earnings rally pushes ABNB to close 9-month gap, bulls set sights on $160

Airbnb (ABNB) stock managed to close the gap created on May 9, 2022, after the short-term rental platform disclosed a wide earnings beat in Tuesday's post-market session and raised its guidance for the year's first quarter. ABNB stock shot up more than 10% to a high of $135.60 afterhours, which closed the gap created when the company reported Q1 2022 earnings nine months ago and subsquently closed down over 12% lower.

Airbnb reported earnings of $0.48 a share – or 78% ahead of analyst consensus of $0.27. Revenue of $1.9 billion also came in above Wall Street consensus of $1.87 billion.

Airbnb stock news: Q1 guidance provokes rally

The $0.48 EPS on the bottom line was well ahead of the 8 cents earned one year ago, and guidance showed that management is now pivoting to profits. Airbnb raised YoY net income margins by more than 4x to 17%, which was the primary reason for the EPS beat.

“Guest demand remained strong throughout 2022," Airbnb said in a shareholder letter. "All regions saw significant growth in 2022 as guests increasingly crossed borders and returned to cities on Airbnb."

That first statement is significant since short-term rental owners were complaining throughout Q4 about lack of demand in certain hot markets. Some owners said they had seen an 80% dropoff in their listings, which had led to worries from Wall Street analysts.

A major dropoff in demand is clearly not showing up in the fourth quarter results, but total nights booked of 88.2 million was just below consensus of 90.1 million. However, both total nights booked and gross booking revenue rose 20% YoY.

For the current quarter, Q1 2023, Airbnb CEO Brian Chesky forecast revenue between $1.75 billion and $1.82 billion. This range is well ahead of the $1.69 billion sought by analysts. Chesky and other executives said that average daily rates, $153 per night in Q4, fell 1% YoY but that this was due to exchange rates. For the first quarter and full year, management expects a continued dip on the average daily rate due to a different mix of supply and new discount tools.

Airbnb stock forecast

Airbnb stock bulls should be excited with ABNB breaking through the $131.50 resistance line that had once worked as strong support in March 2022 before May's gap down. The May 9, 2022, plunge left a gap from $133.04, which has now been closed in Tuesday's afterhours session. To be sure, bulls will require a close above $133.04 in Wednesday's regular session.

With that barrier out of the way, however, bulls will now focus their ire on $160. That is the bottom of a price zone ranging up to $164 that worked as both support and resistance in the February through April part of 2022. Above there lies further resistance at $176 from the same time period. Of course, in the meantime the macro picture may make this rally undoable. In that case either $131.50 or the $125 to $128 resistance zone may provide needed support.

ABNB daily chart