Is Airbnb (ABNB) Ready to Breakout?

Airbnb Inc. (ABNB) is the world’s largest online alternative accommodation travel agency, also offering booking services for boutique hotels and experiences. Listings from the company’s 4 million hosts are spread over 220 countries and 100,000 cities. Transaction fees for online bookings account for all its revenue….

Airbnb Inc. (ABNB) had a solid second quarter where it beat expectations in both earnings and revenues. ABNB benefited from pent-up travel demand as people got vaccinated and many travel restrictions were lifted. The firm has also expanded into other hospitality options such as outdoor and nature activities.

ABNB also has a strong balance sheet. At the end of the second quarter, the company had $7.4 billion in cash on hand compared to no short-term debt. This led to a Quality Grade of B in our POWR Ratings system. Revenue is expected to rise 68.3% for the year, while earnings are forecasted to jump 91.2%.

However, the stock looks very overvalued with a forward P/E of 555.56. ABNB has shown bullish momentum since mid-July. This is evident in the chart below.

Take a look at the 1-year chart of ABNB below with the added notations…

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