On Friday, Airbnb Inc. (NASDAQ:ABNB) shares surged more than 11% after announcing its most recent quarterly results. The company reported its fiscal third-quarter revenue and earnings Thursday after markets closed, beating the consensus for Street expectations. Airbnb’s quarterly revenue and earnings rose to the highest level ever amid a rise in home rentals.
The company posted FQ3 GAAP earnings per share of $1.22, beating the average for analyst estimates of $0.70, while revenue for the quarter increased by 67.2% from the same quarter in 2020 to a record-setting $2.24 billion, exceeding the consensus for Street estimates by $180 million.
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The company expects growth to continue in Q4 as travel restrictions continue to be lifted globally.
Is it safe to buy Airbnb shares?
From an investment perspective, Airbnb shares trade at a steep forward P/E ratio of 444.61, making the stock less compelling to bargain hunters.
In addition, despite its record FQ3 revenue and earnings, analysts expect its bottom line to decline by more than 566% in full-year 2020, before bouncing back by 132% next year.
However, given the company’s massive earnings beat in Q3, it could significantly outperform expectations in the coming quarters.
Moreover, its long-term outlook looks extremely exciting as vacation travel bounces back from the adverse economic effects of Covid-19.
Technically, Airbnb shares seem to have recently spiked to complete a bullish breakout from an ascending channel formation. As a result, the stock has moved deep into overbought conditions, creating a perfect opportunity for a pullback.
Therefore, investors could target short-term pullbacks at about $186.18, or lower at $167.25, while $216.07 and $234.34 are crucial resistance zones.
Still an exciting long-term buy?
In summary, although the recent spike in the Airbnb stock price appears to have created an exciting shorting opportunity for short-term investors, its long-term outlook is still compelling.
Therefore, it could still be a magnificent buy for those willing to overlook its steep pricing.
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