Weekly Newsletter   Challenge account   Weekly Newsletter   

Technical view: Airbnb (ABNB)

Airbnb reported earnings, and the stock crashed by more than 7% after-hours. In this technical view, we take a look at what happened:

Airbnb reported Adjusted Earnings Per Share (EPS): $1.79 actual versus $1.53 expected = BEAT

Revenue: $2.88 actual billion versus $2.83 billion expected = BEAT

Nights and Experiences Booked: 99.7 million versus 99.9 million expected = MISS

Airbnb said that Q3 2022 was its “most profitable quarter ever.”

The company guided 4Q revenue between 1.8 billion and 1.88 billion. Analysts expected 1.86 billion. That is in the middle of the guidance. Yet Wall Street sold off. What am I missing? I think I am missing nothing. Wall Street dudes are idiots. And that makes this company a buy in my book:

Technical view

ABNB is in stage #1. The stock continued its sideways move and refused to participate in last week’s rally. It has a resistance at $129 that the stock needs to clear before moving higher. The tech selloff may have impacted the stock and may resume its uptrend. It is still attempting to morph into stage #2. It is best seen on the weekly chart. If the market resumes a new bull market, the stock will continue higher too. At the current levels, it is a good opportunity to buy (but slowly, do not commit all your money). However, before buying, I recommend waiting for the company to report earnings. If they disappoint, the stock may drop lower.

Technical view

The stock is overvalued based on the company’s fundamental data. But this is a tech company with a good business model that competes strongly with the hotel industry. And it will trade with a premium to the stock price.
The chart below indicates the price compared to the company’s fundamental data. The orange indicates the fair value dashed line. The stock trades way above that line.
The trend is still weak but attempting to move higher. We invest when everyone panics, and this is the case.

Technical view

The stock is now BUY

If you want to learn more about our SPX weekly analysis, subscribe to our weekly newsletter.

Leave a Reply

Your email address will not be published. Required fields are marked *