Strong Cash Yield: Is Airbnb Stock A Buy?
Airbnb (ABNB) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market
What Is Happening With ABNB
ABNB may be down -13% so far this year but is now trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also belowits 3-year average.
The stock may not reflect it yet, but here is what’s going well for the company. Airbnb reported strong Q3 2025 performance with Nights and Seats booked up 9% year-over-year, accelerating from Q2. Active listings now exceed 8 million globally, and average daily rates have stabilized at $173 in 2025. The company is expanding offerings with Airbnb Experiences and a hotel pilot program, alongside integrating AI for improved user experience. Q4 revenue guidance anticipates an 8.5% year-over-year increase, exceeding analyst estimates.
ABNB Has Good Fundamentals
- Good Cash Yield: Not many stocks offer free cash flow yield of 6.6%, but Airbnb stock does
- Strong Margin: Last 12 month operating margin of 22.6%
- Growth: Last 12 revenue growth of 10.2% – low growth, but this selection is all about high yield and margin
- Valuation: ABNB stock currently trading at 32% below 2Y high, 11% below 1M high, and at a PS lower than 3Y average.
Below is a quick comparison of ABNB fundamentals with S&P medians.
| ABNB | S&P Median | |
|---|---|---|
| Sector | Consumer Discretionary | – |
| Industry | Hotels, Resorts & Cruise Lines | – |
| Free Cash Flow Yield | 6.6% | 4.2% |
| Revenue Growth LTM | 10.2% | 6.1% |
| Revenue Growth 3YAVG | 14.2% | 5.4% |
| Operating Margin LTM | 22.6% | 18.8% |
| Operating Margin 3YAVG | 20.4% | 18.2% |
| LTM Operating Margin Change | 7.6% | 0.2% |
| PE Ratio | 26.5 | 23.0 |
*LTM: Last Twelve Months
But What Is The Risk Involved?
While ABNB stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. Airbnb slipped about 14% during the Covid pandemic and took a much harder hit, dropping nearly 62%, in the inflation shock of 2022. Even with a strong brand and solid business model, the stock hasn’t been immune to steep sell-offs. It’s a reminder that no matter how favorable the outlook, market turmoil can still trigger sharp corrections. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read ABNB Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
For more details and our view, see Buy or Sell ABNB Stock.
Stocks Like ABNB
Not ready to act on ABNB? Consider these alternatives:
We chose these stocks using the following criteria:
- Greater than $2 Bil in market cap
- Dipped last month & meaningfully below 2Y high
- Current P/S < last few year average
- Strong operating margin with no instances of large margin collapse
- High free cash flow yield
A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:
- Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
- Win rate (percentage of picks returning positive) of about 74% for 12-month period
- Strategy consistent across market cycles
Portfolios Beat Stock Picking
Individual picks can be volatile but staying invested is what matters. A diversified portfolio helps you stay the course, capture upside and reduce downside
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.