Following ‘Soaring’ IPO, Airbnb Stock Is Downgraded – A Victim of Its Own Success

AirBnB home rental service
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Gordon Haskett Research Advisors has downgraded Airbnb to “underperform” from “buy” today — a two-level downgrade — after the stock more than doubled last week following the company’s soaring IPO.

“Investors we’ve spoken with like Airbnb’s business model and want to be long-term holders but are now looking at selling the stock because they no longer feel comfortable owning it trading at a 300 to 400% valuation premium,” Gordon Haskett Capital analyst Robert Mollins wrote, cutting by two notches his rating on Airbnb shares to underperform from buy.

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Airbnb was downgraded to “underperform” from “buy” with a $103 price target, representing a 26% downside from the stock’s closing price on Friday of $139.25. On Monday, Airbnb shares were down 7% to $129.50.

The home-sharing giant’s valuation is “more than stretched” when compared to other stocks in the online travel space, according to the Gordon Haskett analyst, who places Airbnb in the same category as fellow travel companies Booking Holdings and Expedia.

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The Gordon Haskett analyst said in his report that his price target for Airbnb’s shares is $103 per share. He further noted that he remained positive in his forecast for the company’s long-term future, adding that an overwhelming majority of investors he has spoken to are interested in cashing in on their quick gains, according to reports.

He also noted that Airbnb was trading around 15 times 2022 revenue estimates, compared with an average of four times for online travel agency peers. If you’re interested in undervalued stocks rather than overvalued, learn more here.

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About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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