ABNB is in stage #2. The stock just broke above its resistance at $130 a share and rallied hard. The stock is reaching another resistance at $145, and we need to see if it breaks above it but I would assume it would gain momentum and breaks it. The weekly chart shows the breakout nicely. The company became profitable last year, and I expect this stock to reach $245 a share in the next 5 years.
ABNB’s revenue is slowly growing despite it is a bit choppy. It is still a risky investment as the company still needs to establish its good financial track record. A one year revenue growth is still negative (-13.60%) but two years’ revenue is already +16.7% positive.
ABNB’s free cash flow is positive and growing. A one-year growth rate is 98%, 2-year growth sits at 42%. Both are very impressive numbers. If this stays, and keeps growing at this rate, the stock will follow fast too.
The company became profitable last year. It is still not as impressive as we would like to see, therefore, investing to this stock is speculative. But we see positive growth.
ABNB has a lot of cash on hand and very little debt. That is very good. The company is not leveraged.
ABNB doesn’t pay dividends, so purchasing this stock is purely a growth play. I am OK with this. The company has a steady level of shares outstanding and even slowly retiring shares. In 2022 there were 680 million shares outstanding, today it dropped to 670 million (1.98% annual decline). That is good for shareholders.
As indicated, ABNB broke above the consolidation sideways pattern, and it is now on a path to go higher. I expect the stock to go to $245 within the next 5-year period. It can happen sooner, or later. The move may be very choppy (mainly if investors start freaking out about whatever thing that spooks them). But as of now the trend is up.
The stock is now BUY
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