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Airbnb slides 7% premarket despite posting record-breaking Q2 earnings

Airbnb slides 7% premarket despite posting record-breaking Q2 earnings

Airbnb (NASDAQ: ABNB) shares dropped in the after-hours trading sessions on August 2 by over 6%, following what seemed like a solid earnings report. The online accommodation provider saw revenue jump by 57.6% to $2.1 billion and posted earnings per share (EPS) of $0.56.

On Wall Street, expectations were $0.52 EPS and $2.1 billion in revenue. Equally important, the management of the company, in a letter to shareholders, said that this quarter was the most profitable one on record for the firm. 

“From a profitability perspective, we had our most profitable Q2 ever with net income of $379M—a nearly $700M improvement from Q2 2019. We generated $795M of FCF in the quarter—a nearly $1.1B improvement from the -$263M FCF from the depths of the pandemic two years ago.”

ABNB premarket data. Source: Nasdaq

Further, the letter mentioned that the firm has almost $10 billion cash on hand, thus approving a $2 billion share repurchase program

Airbnb posts strong guidance

Additionally, guidance given for the third quarter seemed as a continuation of the positive momentum seen during Q2, as the highest revenue in its history is expected along with stable and increased bookings. 

“In Q3 2022, we anticipate the highest quarterly revenue in Airbnb history. We expect to deliver Q3 2022 revenue between $2.78 billion and $2.88 billion, representing year-over-year growth of between 24% and 29%, and a 69% to 75% increase relative to 2019.”

ABNB chart and analysis

In the run-up to the earnings, since July 14, the shares gained over 27%; however, a cumulative drop of 10% in yesterday’s session might look to pare back those gains. Overall, the short-term trend still remains positive, while the long-term is negative, with the shares trading in a range between $90.17 and $117.78, over the past month. 

Right now, the stock is down 6.74% in premarket trading, with the support zone ranging from $108.14 to $108.50, and the resistance line at $142.95.

ABNB  20-50-200 SMA lines chart. Source. data. See more stocks here.

Travel stocks seem to be performing well, with the release of pent-up demand boosting the share prices of most travel companies.

Inflationary worries have some investors fleeing the travel names, but on the whole, the sentiment should improve the moment inflation starts slowing or reversing; until then, investors should exercise caution. 

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