ABNB's Price Display Feature Boosts Transparency: Time to Hold Stock?

Airbnb ABNB announced on Monday that it is rolling out total price display as the default setting for all guests globally, aiming to improve pricing clarity and support better booking decisions across its platform.

The new pricing format shows the total cost of a stay, including all fees before taxes, directly in search results. First piloted in select markets in 2019 and made available globally through an optional toggle two years ago, the feature has since been used by nearly 17 million guests to date.

The update is accompanied by enhancements for hosts, including pricing tools, such as discounts, promotional features, and the “similar listings” tool, which more than two million hosts have used to benchmark prices. Airbnb has also introduced guest-facing tools like search tips, which highlight opportunities to save through longer stays.

Frequent Feature Update Aids Airbnb’s Prospects

This latest update is part of Airbnb’s broader effort to refine the guest and host experience. Over the past few years, the company has rolled out more than 535 features and upgrades, including the launch of Guest Favourites to highlight top-rated listings, and the Co-Host Network, which now supports nearly 100,000 listings and helps homeowners connect with experienced local managers.

Airbnb, Inc. Price and Consensus

Airbnb, Inc. price-consensus-chart | Airbnb, Inc. Quote

Airbnb has enhanced search functionality and merchandising, making it easier for users to discover the right stays. As a result, the company has reported higher conversion rates and expects these product-driven improvements to continue supporting growth into 2025.

These product-driven improvements have supported Airbnb’s strong financial results. In the fourth quarter of 2024, revenues rose 12% year over year to $2.5 billion, driven by solid growth in nights stayed and a modest increase in Average Daily Rate.

Also, Airbnb reported a Gross Booking Value of $17.6 billion, up 13% year over year, driven by a 12% increase in Nights and Experiences Booked to $111 million.

These improvements have also benefited Airbnb shares, which have lost 15.1% year to date, outperforming the broader Zacks Leisure and Recreation Services industry and industry peers, Vail Resorts MTN, Royal Caribbean Cruises RCL and Camping World CWH, whose shares have dropped 28.8%, 17.8% and 42.9%, respectively. Industry declined 20.1% over the same timeframe.

ABNB Offers Positive Guidance for Q1 

For the first quarter of fiscal 2025, Airbnb projects revenues between $2.23 billion and $2.27 billion, reflecting a year-over-year increase of 4% to 6%, or 7% to 9% when excluding the impact of foreign exchange fluctuations. 

The Zacks Consensus Estimate for revenues is pegged at $2.26 billion, suggesting a 5.57% increase from the year-ago quarter’s reported figures.

For the first quarter of fiscal 2025, the Zacks Consensus Estimate for earnings is pegged at 25 cents per share, suggesting a year-over-year decline of 39.02% (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Zacks Rank

ABNB currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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