What’s Next For Airbnb Stock?

August 12th, 2025 by Trefis Team
ABNB: Airbnb logo
ABNB
Airbnb

Airbnb (NASDAQ: ABNB) has slid about 11% in the past month—despite posting a standout Q2. Revenue jumped 13% year-over-year to $3.1 billion, topping the $3.03 billion consensus, while EPS of $1.03 beat expectations of $0.94. User engagement hit record highs. So why the drop? Investors are looking past the beat: management warned of slower growth and slimmer margins in the back half of 2025, even as it pushes ahead with bold—and expensive—expansion plans.

That said, if you seek upside with lower volatility than individual stocks, the Trefis  High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception. 

Image by Peggy from Pixabay

What’s Driving Investor Nerves

Airbnb is spending $200 million to fuel its next growth phase; revamping its app with AI-powered personalization, expanding into “Services & Experiences,” and hosting high-profile celebrity events. These bets could deepen user engagement and diversify revenue, but they’ll take time to scale and may weigh on profitability. At the same time, tightening short-term rental regulations in major cities like New York, San Francisco, and Paris are pushing Airbnb to focus growth in smaller, regulation-friendly markets. The payoff from this pivot remains uncertain.

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Valuation: Premium, But Not Excessive

Airbnb trades at a premium to the S&P 500 but still slots between its two largest rivals. Its 6.6x price-to-sales, 29.3x price-to-earnings, and 17.0x price-to-free-cash-flow ratios outpace the index’s 3.0x, 22.5x, and 20.4x. Yet it remains cheaper than Booking Holdings (NASDAQ: BKNG) (7.3x sales, 37.7x earnings) while commanding a far richer tag than Expedia (NASDAQ: EXPE) (1.7x sales, 22.1x earnings)—a valuation that reflects confidence in consistent growth, without assuming a breakout surge.

That confidence stems from Airbnb’s Revenue performance. The company has posted a three-year average growth rate of 20%, handily outpacing the S&P 500’s 5.2%. Over the past year alone, sales climbed 10% to roughly $12 billion, more than double the market’s 4.5% gain.

Bottom Line

The stock’s recent dip is less a sign of trouble than a recalibration of expectations. Airbnb remains a premium brand with strong growth and a durable platform advantage. The question for investors is whether they’re willing to ride out a slower near-term climb in exchange for a potentially more powerful long-term runway.

Looking for Smarter Alternatives?

Investing in a single stock can be risky. You could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.

It should also be noted that stocks can drop sharply – 20%, 30%, even 50% –as we’ve seen during past market shocks. No stock is immune. Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

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