It started in San Francisco with two guys and a mattress.
The two guys were roommates and former schoolmates Brian Chesky and Joe Gebbia, who in 2007 came up with an idea of putting an air mattress in their living room and turning it into a bed and breakfast.
Nathan Blecharczyk, Chesky's former roommate, joined a short time later as the chief technology officer and third co-founder of the new venture.
The website launched on Aug. 11, 2008, and the company had its first customers during a conference held by Industrial Designers Society of America, where travelers had a hard time finding lodging in the city.
That company, originally called AirBed & Breakfast, became Airbnb (ABNB) and went public on Dec. 10, 2020, via an initial public offering, raising $3.5 billion.
The platform currently has a market capitalization of roughly $106 billion and along the way, Airbnb rocked the hospitality industry.
Analysts react to earnings
A 2018 study by Dogru, Mody, and Suess found that a 1% growth in Airbnb supply across 10 key hotel markets in the U.S. between 2008 and 2017 caused hotel RevPAR, or revenue per available room, to decease 0.02% across all segments.
The platform recently banned indoor security cameras in its listings, a change many users have been calling for after its problem with hidden cameras was exposed by several users.
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In February, the company posted a loss of 55 cents per share, while analysts surveyed by FactSet were calling for a profit of 66 cents a share.
However, the loss included a $1 billion charge for tax withholding expenses and lodging tax reserves. Leaving out that and other adjustments, Airbnb showed a profit of $489 million, or 76 cents a share.
Sales totaled $2.22 billion, compared with the FactSet estimate of $2.17 billion.
A year earlier, Airbnb earned 48 cents a share on sales of $1.9 billion.
Several analysts raised their price targets for the company following the release of the earnings report.
Morningstar analyst Dan Wasiolek wrote that he believed “Airbnb's global online-travel-agency position will strengthen over the next decade, driven by the leading alternative accommodation network.”
“We think this network advantage will be supported by generative artificial intelligence investment and expansion into the experiences vertical over the next several years,” he said.
Chesky discussed AI during the company's earnings call with analysts.
"There is a new platform shift with AI, and it will allow us to do things we never could have imagined," he said. "While we've been using AI across our service for years, we believe we can become a leader in developing some of the most innovative and personalized AI interfaces in the world."
Ready to expand with AI
In November, Airbnb reportedly paid nearly $200 million to acquire GamePlanner.AI, a stealth AI company led by Adam Cheye, the co-founder and original developer of the digital assistant Siri, which was acquired by Apple (AAPL) .
Stealth mode refers to startups that operate out of the public eye to avoid distraction, protect intellectual property or other reasons.
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"With these critical pieces in place, we're now ready to expand beyond our core business," Chesky said.
"And I believe that we can build one of the leading and most innovative AI interfaces ever created," he added. "It's like the ultimate concierge, an interface that is adaptive and evolving and changing in real time, unlike no interface you've ever seen before."
Airbnb received another round of price target increases from analysts on March 14.
Truist raised the firm's price target on Airbnb to $131 from $118 and kept a hold rating on the shares as part of a broader research note on Lodging and Leisure.
The firm is updating its earnings estimates and making changes to its model following the sector's fourth-quarter earnings.
Meanwhile, Bank of America raised the firm's price target on Airbnb to $168 from $155, while keeping a neutral rating on the shares.
The rental data platform AirDNA estimated Airbnb's nights booked were up 24% year-over-year in February versus up 5% year-over-year in January, according to BofA analysts, who noted that February likely benefited from Leap Year and that AirDNA changed its nights estimate methodology.
Still, BofA said, the data suggests accelerating growth on easing comps and the firm is applying a higher multiple on nights and margin upside potential, but reiterates a neutral rating given valuation.
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