Airbnb share price is “more than stretched” says Wall Street analyst

US: Airbnb shares fell on Monday after Wall Street analysts warned that first-day trading surges resulted in a “precarious” market valuation.

Airbnb’s valuation is “more than stretched” when compared with other travel peers, research firm Gordon Haskett said in a note downgrading the stock to underperform from buy.

Airbnb shares soared 113 per cent on their first day of trading following its initial public offering last week, but dropped 10 per cent yesterday. They reached a peak of $154 per share on Thursday, but opened at $127 yesterday, closing at $130. Today the share price fell around five per cent in the first half an hour of trading to $123.

Airbnb was trading around 15 times 2022 revenue estimates, compared with an average of four times for online travel agency peers, Gordon Haskett analyst Robert Mollins wrote.

Analysts at firms that underwrote the Airbnb IPO won’t publish research until the new year. Bloomberg has tracked five analysts that cover Airbnb – two have buy ratings, one a hold and two advise sell.

 

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