Virtual hotelier actions Airbnb (NASDAQ: ABNB) was caught in the technology stock market crash Tuesday morning, fall of more than 10% at the start of the session while the Nasdaq fell by 4%.
This is the bad news. The good news is that by 11:30 am EST things had calmed down a bit. The Nasdaq recovered at “only” a sale of 1.7%, and Airbnb is down “only” by 5.2% – and Loop Capital may be part of the reason for Airbnb’s partial takeover.
Loop Capital, you see, upgraded Airbnb shares to “buy” yesterday, ahead of the company’s first report as a publicly traded company, due Thursday, February 25. Loop gave the stocks a price target of $ 240, which implies roughly 30% upside the stock, according to StreetInsider.com.
“The growth in bookings for other alternative accommodation providers … has improved sequentially in Q4,” observes Loop, and this trend implies that Airbnb could exceed expectations in Q4 2020, and that it ” also continues in the 1st quarter “2021.
The most intriguing part of Loop Capital’s analysis – for equity investors – is this observation: third-party analytics firm AirDNA observed that “ABNB’s unit volume showed a strong directional correlation with bookings of UBER carpooling during the 11 quarters of recorded data. . “
Now, there are two conclusions an investor can draw from this observation (assuming it holds true in the future). First of all, Uber (NYSE: UBER) “beat the winnings“but” missed income “when he reported earlier this month, a fact that could imply that Airbnb will similarly disappoint on sales when this reports Thursday. (This could mean that Loop is making a bad call recommending that you buy Airbnb shares today).
Perhaps more importantly, the fact that Uber schedules its earnings reports about 10 days before Airbnb reports means investors can get some sort of snapshot of how Airbnb is performing in a given quarter simply. by reviewing Uber’s report first.
To put it more simply: Uber earnings reports can give investors a kind of crystal ball, allowing them to even 10 days in the future and see how Airbnb’s revenue will evolve. Let’s go back Thursday and see how it works.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.