ABNB - Airbnb: An Evolving Capital Return Play

2024-06-25 14:03:45 ET

Summary

• Airbnb continues to see growth in key metrics, with double-digit increases in gross booking values and revenues in Q1'24.
• The company's strong free cash flow and potential for aggressive capital return make it an attractive investment.
• Despite a high price-to-earnings ratio, Airbnb's expanding business and FCF profitability could lead to increased cash returns to shareholders in the future.

Airbnb ( ABNB ) continued to see solid growth in its key performance metrics, revenues and free cash flow in the first fiscal quarter. The key strength of Airbnb is its massive amount of free cash flow it generates from its booking platform, and I believe Airbnb could become a more aggressive capital return play in the future. While shares are not necessarily cheap based off price-to-earnings, the business is expanding, growing its profitability and I can see a scenario in which the company returns more cash to shareholders in the future!...

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