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Stock Strategist Industry Reports

Should I Invest in Airbnb?

The market’s optimistic valuation for Airbnb is tough to accommodate.

Jul 7, 2021

Mentioned: Hilton Worldwide Holdings Inc (HLT) , Sabre Corp (SABR) , Airbnb Inc (ABNB) , MGM Resorts International (MGM)

Although Airbnb (ABNB) shares have tumbled roughly 30% since mid-March (versus an 9% increase in the Morningstar US Market Total Return Index), the current price still appears elevated, at a 70% premium to our intrinsic valuation. Our fair value estimate for Airbnb currently sits at $84, compared with the average sell-side target price of $171.

We believe two main factors are driving the market’s overvaluation:

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Dan Wasiolek does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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