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Airbnb stock falls 8% on soft revenue guidance and room nights growth

Airbnb (ABNB) saw its shares tumble 8% in premarket trading Thursday after the vacation rental company reported its financial results for the fiscal Q1 2024.

The company posted earnings per share (EPS) of $0.41, exceeding analyst expectations of $0.23. The company generated $2.14 billion in revenue during the period, surpassing the consensus estimate of $2.06 billion.

Nights and experiences booked in the first quarter rose by 9.5% year-over-year to approximately 133 million. This growth was fueled by a 21% increase in bookings across Asia-Pacific and a 19% surge in Latin America. Airbnb said that bookings in North America "slightly decelerated" during the quarter.

For Q2, Airbnb anticipates revenue ranging from $2.68 billion to $2.74 billion, slightly below the projected $2.74 billion.

Despite soft room night growth, "1H24 was in-line and the expected 2H24 revenue acceleration from summer travel and the Olympics should de-risk FY24 consensus," Mizuho analysts said in a note.

"Furthermore, supply growth continues to outpace demand N-T, a good leading indicator that pricing could moderate to drive demand going forward," they added.

Meanwhile, KeyBanc Capital Markets analysts maintained a Sector Weight rating on ABNB and expect the first-quarter results to remain polarizing. They believe that bullish investors are focusing on potential margin improvements and take rate opportunities, while bearish investors are focused on another miss in room nights and experiences and normalized revenue growth.

"Our view remains unchanged; Airbnb is undergoing a model transformation and travel is a slow rate of change business, so 2023's 37% margin profile is likely a peak until 2025E at the earliest," they added.

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