Airbnb stock analysis: get ready for recovery?

Airbnb is attempting to form a double bottom pattern

Airbnb illustration                                 
Airbnb illustration - Picture: Shutterstock
                                

Airbnb’s second quarter revenue of $1.3bn was 299% higher than the $335m reported in the year-ago quarter and 10% higher than the second quarter of 2019. The numbers beat analysts’ revenue estimates of $1.26bn.

Gross booking value of $13.4bn was also way ahead of analysts’ estimates of $11.56bn. The company reported a net loss of $68m, or 11 cents a share, well below the $264m, or 36 cents a share, loss projected by analysts surveyed by FactSet.

The strong numbers by Airbnb show a rebound in the travel industry as the pace of vaccination improves. A bounce-back in cross-border travel could further benefit the company. However, Airbnb warned of a softer Q3, because of the COVID-19 Delta variant.

Dave Stephenson, CFO of Airbnb, said during a call with analysts, “As we exit Q2 and come into Q3, we have a combination of fewer bookings for the fall, just given the nature of some of the seasonality, and any kind of impact potentially on COVID concerns,” CNBC reported.

The consensus analyst price target for Airbnb is $172.50, according to Yahoo Finance. Could ABNB shares go up and meet analyst expectations or will the resurging COVID-19 infections keep investors at bay? Read our Airbnb share analysis to find out.

Airbnb share price technical analysis: weekly chart

Airbnb weekly price chartAirbnb’s stock price corrected from $217.65 in February to $128.42 in May, a 41% fall in just over three months, according to data on currency.com

The bulls purchased the dip but the relief rally met with stiff resistance at the 20-week exponential moving average (EMA). However, a minor advantage is that the subsequent decline was arrested at $128.98 in July. This suggests that traders are accumulating on dips.

The price has reached the 20-week EMA where the bears are again mounting a stiff resistance. If the price turns down again from the current level, the bears will make one more attempt to sink the stock below the $128.42 to $120.25 support zone. If they succeed, the stock could drop to the psychological level at $100.

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Conversely, if bulls push and sustain the price above the 20-week EMA, the stock could rally to $171.63 and later to $192.27.

Airbnb share price technical analysis: daily chart

Airbnb daily price chartAirbnb’s stock price has been trading inside the $155.78 to $128.42 range for the past few days. Both moving averages are criss-crossing each other and the relative strength index (RSI) is near the midpoint, suggesting a balance between supply and demand.

A breakout and close above $155.78 will complete a double bottom pattern, which has a minimum target objective of $183.14. If bulls can clear this hurdle, the uptrend could challenge the psychological level at $200.

On the other hand, if the price turns down from the current level or the overhead resistance, the stock could extend its consolidation for a few more days. The bears will have to sink and sustain the price below the range to signal the resumption of the downtrend. 

Airbnb: stock buy or sell at these levels

Airbnb’s share price analysis shows the price has been trading inside a range. The price action inside a range is usually random and volatile. Therefore, it is better to wait for the price to escape the range before establishing fresh positions.

A breakout and close above the range will complete a double bottom pattern, which could result in a strong recovery. This positive view will be invalidated if the price turns down and breaks below the range.

The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.

Trade Airbnb stock: Airbnb shares price

Airbnb, Inc.
Daily change
93.35
Low: 92.43
High: 95.62

Further reading

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