Airbnb: Day 1, Again?
“After 2 billion guests, what have you learnt?” Brian Chesky, Airbnb’s founder and CEO, answers this in a simple but powerful way: that people are open, curious, and want connection — in the real world. Airbnb is a company built around that premise: belonging, not just booking. And with its recent Summer Release, the company’s ambition has expanded — “Now you can Airbnb more than Airbnb.”
The question is whether Chesky can reinvent Airbnb from here, and scale this next chapter. We don’t know the answer — but we do have enough conviction that he can. What’s clear from the latest product updates is that Airbnb remains a design- and user-centered company with a deep sense of purpose. This “Why” — a mission grounded in connection and humanity — is not just branding; it shows up in how the product is evolving.
New Revenue Streams: Services & Experiences
Analysts have modeled out the potential upside of these new offerings. Assuming a 15% booking rate by guests for services priced at $150, they estimate a 3.5% incremental revenue uplift. For Experiences — where Airbnb arguably has a more “captive” audience — the team assumes 10% of guests will book a $250 experience per trip. This could result in a 5.3% revenue uplift, potentially more if non-guests begin to engage.
Both BofA Securities and Evercore ISI have retained their Neutral or In-Line ratings. As Mahaney put it, analysts are “waiting for evidence that ABNB can reverse its multi-year deceleration trajectory and reaccelerate revenue and profit growth.”
Financials & Valuation
Airbnb currently trades at an $84B valuation, with a 32x PE (GAAP) and 19x cashflow multiple. The company generated roughly $4.3B in cashflow, and is on track to become debt-free, having paid down all long-term liabilities. It also maintains a ~$10B float from customer payments, which gives it strong balance sheet flexibility.
We initiated our position at $138 per share, which in hindsight wasn’t the best possible entry point, especially considering recent macro-driven dips in discretionary travel names. That said, our investment remains appropriately sized at 8% of the portfolio, reflective of both the conviction in Chesky and the risk in execution.
Valuation Outlook
Our internal DCF model, completed in December 2024, estimated a fair value of $149 per share. That model assumed a more modest long-term growth rate of 5%, compared to the current 9% implied by market expectations. Since then, no material changes have occurred in Airbnb’s financial profile. While we had hoped that the Summer Release and new verticals might catalyze analyst upgrades or re-ratings, that hasn’t materialized — at least not yet. We continue to hold and watch closely.
