Airbnb shares have flatlined since the 2020 IPO, but now could finally be their time to shine

Airbnb (NDQ:ABNB) has been a fascinating company to watch since listing in December 2020. On one hand it has not performed as investors may have expected.

It listed at a time that was arguably the worst time to do – when the industry was shut down. But shares held up well, and there surely was more upside to come when travel returned…or so we thought. So, now that travel is back to normal, where to next? Sure, you could blame the damage of high interest rates on the tech sector…but that no longer holds.

Will the company ever deliver returns for investors? We think if not now, it never will.

Introduction to Airbnb shares

For the sake of those who’ve been on Planet Mars since 2007, let’s recap the company. In 2007, the co-founders Joe Gebbia, Nathan Blecharczyk and Brian Chesky had the idea of putting an air mattress in the living room of their San Francisco residence and renting it out – calling it AirBed and Breakfast.

By the next year, they turned it into their own business, hosting the first guests at the Industrial Design Conference, when guests had a hard time finding lodging into the city. The next decade was a period of non-stop growth into new markets as well as into ‘experiences’.

There are many parallels between Airbnb and Uber. Both companies are icons of the so-called ‘sharing economy’. They expanded quickly despite competition from entrenched players (hotels and taxis respectively). And despite controversies and even occasional legal actions, consumers went out of their way to use Airbnb and Uber.

By the time Airbnb listed, it was valued at US$100.7bn, despite pandemic shutdowns to travel that sent its bottom line into the red by more than $4bn.

It is easy to forget the other thing that could’ve been an impediment to the company’s listing – WeWork’s botched IPO and the departure of its CEO Adam Neumann as a consequence. The pandemic did mean that the company had to cancel its plans to list without raising capital and list in a traditional way, by raising capital through the issue of new shares.

The company saw travellers return as restrictions lifted, and made its inaugural profit in 2022 – $1.9bn. And consider that during the 2024 Paris Olympics, it increased the accomodation supply by 35%.

Adjusting to the new normal

Things have not been that easy in the post-pandemic era, however. The company exited Russia and China, which were big markets for it. Even though travel is growing, the company’s growth (in ‘nights and experiences booked’) has been slowing down.

Airbnb hasn’t been as much of a talker about how it could benefit from AI as other companies, and while it has begun to talk – it is no chip maker or AI software company that is right at the centre.

And Wall Street analysts want new non-core products to drive growth. The company, aware of this, hinted a new type of marketplace could be coming offering cleaning and maintenance services, airport rides, or even private chef or sommelier sessions and it has begun to deliver through its Airbnb Services offering.

And ever since the beginning of Airbnb, there has been scapegoating of the company for housing affordability and over tourism. Some of this has come to nothing, but of particular concern is EU proposals to regulate Airbnb which will come by Christmas.

Good financial results nonetheless

In 2024, it made US$11.1bn in revenue and $81.8bn Gross Booking Value, both up 12%. There were 492 million Nights and Experiences Booked, up 10%, and net income was US$2.6bn. This was 45% down from the year before, although the prior year was inflated by a $2.9bn tax benefit. EBITDA was $3.8bn and free cashflow was $4.5bn, representing 34% and 40% margins.

Its most recent quarterly results, for Q2 of 2025, saw $2.9bn revenue and a $600m profit, which led to shares rising 5%. It guided to $4-4.1bn in Q3 of 2025, a figure we think is inflated by the Northern Summer holidays. It had guided to a 34.5% ‘adjusted EBITDA margin’ and to a $200-250m full year figure of investments in launching and scaling new businesses.

Analysts are not optimistic

Analysts are optimistic about the company in the future.

There are 35 analysts, and their mean target price is $137.97, up from $122.89 right now. For 2025, they expect $12.1bn revenue, $4.2bn EBITDA and $4.22 EPS – up from $11.1bn, $4bn EBITDA and $4.11 EPS in 2024. For 2026, they expect $13.3bn revenue, $4.7bn EBITDA and $4.76 EPS and in 2027, $14.6bn revenue, $5.3bn EBITDA and $5.59 EPS.

These multiples place the company at 25.7x P/E and 2x PEG for 2026.

Our conclusion

Airbnb will need to follow through on its promises to delve into new products, because it may have reached the ceiling (or be close to reaching it) with its core business. There may be some opportunity to profit in the short-term.

We would note the travel industry is far more competitive and lower margin than it was pre-pandemic, so it may not be the long-term growth story it once was, unless it delves into new products or joins the AI race; but we think the company is finally realising this and taking action.

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