Why Airbnb Stock Jumped 25% in July
Shares of Airbnb (NASDAQ: ABNB) stock soared 25% in July, according to data provided by S&P Global Market Intelligence. The powerhouse travel company didn't report any significant news in July, but it was lifted along with the broader market as spending stayed strong. Investors may have seen its huge stock price decline as an opportunity considering the company's strong performance. The stock also may have increased as the market anticipated a strong second-quarter earnings report, which indeed came out yesterday.
Airbnb has made a significant recovery from pandemic-induced declines and has posted several (not consecutive) quarters of net profits. It's no longer a tech upstart bleeding cash, but rather an efficient, revenue-generating travel disruptor.
In the second quarter, revenue increased 58% year over year to $2.1 billion. Airbnb posted net income of $379 million, the company's first-ever second quarter of profits. At a time when inflation is causing customers to cut back spending in certain areas, but when people are still itching to get back to travel after long periods of travel restrictions, Airbnb is enjoying the travel rebound. It is well equipped to handle strong demand with a huge assortment of global vacation rentals that meet different criteria. Even as urban stays made a comeback for the second quarter in a row, non-urban listings increased by 50%. Long-term stays, or those 28 days or longer, continue to be the company's fastest-growing category. These trends point to Airbnb being far from a typical travel company and to all sorts of growth opportunities that traditional travel companies can't match.
Source Fool.com
