ABNB Standing Out Among Travel Stocks

estimates and issuing strong third quarter revenue and gross booking volume guidance. For more, let's welcome in our panel. Joining us, Eagle and Managing Director and internet equity research at Wedbush, and Christopher Davis, partner at Hudson Value Partners. Eagle, let's start with you. I mean, we're seeing a really nice pop from Airbnb. We're up 15%. I saw that you changed your rating and your price target today in the wake of this report. How are you looking at how the A market is responding to these results. And what are your takeaways from the report? Yeah, thanks. I thought it was a very strong report and probably one of the best that we've seen within the travel space, or I think maybe the best that we saw within the travel space this quarter. We're seeing room nights booked accelerate the guidance for three. Q is ahead of expectations to raise the guidance for the full year. I think there's a number of product initiatives that are hitting. Some are hitting today like reserve now, pay later. The hotels initiative is gaining traction really early and that's a positive. And then we've got a number of other factors that are going to play out over time. So it feels like we sort of have this layered growth trajectory coming. The CEO, Brian Chesky, talked a lot about AI, how that's improving product velocity. There was just a lot of good things in the report. I think Airbnb is positioned pretty well. And that led to our upgrade to outperform today. All right. And Christopher as we look at the the comparison sort of that eagle just hinted at there with the whole broader travel space. I'm looking at Airbnb. They've got revenue up 17%. Booking was up about roughly 8% on the quarter. What is Airbnb doing differently that's allowing it to outperform the broader travel market? Well, I think it comes down to who the customer is and where that revenue growth is coming from. You know, notably to me, the first time bookers at Airbnb grew 11%. And those hotel booking guests that Igor was mentioning, you know, that's growing 35% more. So I think when you look at where that revenue is coming from, it's probably shorter haul domestic trips, maybe some intergenerational travel, you know, taking the kids to grandparents out to something that might be a little bit more affordable. And especially with European travel being more expensive, some of the bigger players, you know, being affected by the Middle East, that's really not something that we see happening with with Airbnb. The other thing that I thought was great about Airbnb right now is they've got this reserve now pay later tool. And in the recent earnings report, 20% of bookings roughly utilize that which allows people to book now but pay over time. And I think for customers that still need to put aside some money to travel but want to start, you know, locking in some plans, you know, that helps to smooth out demand and line things up for Airbnb into future quarters. And Igor, as you look at this quarter, does it signal to you that Airbnb's growth is structural rather than it simply benefiting from favorable travel trends? Yeah, I do think it's a little bit of both. They do have less exposure to to the Middle East. And they they barely called it out while the others are seeing a little bit more of an impact. Now that impact has normalized to a large extent, but it just Airbnb is better positioned. And they talked about being able to navigate these types of things a lot better. Also, the core sort of underlying strength in travel really looks to still be there as well. Airbnb, Expedia and booking all talk all talked about that. Yes, there's some macro issues that that we're navigating. But at the same time the consumer is is willing to spend. And so that's that's been beneficial to. Now that's not the structural question you've been asking, but I think all of these things support that, that growth opportunity and the positioning for, for Airbnb. Structurally, if you if you think about where they are. So in the, in the alternative bookings category around homes, they are the leader. They're, they're starting to push into hotels. There's a whole new addressable market for them. It's been pretty successful so far. They're only in 20 cities. So that's really early. And then on the call, Chesky talked about wanting to be this one stop shop. Right. Rental cars early have been a positive. That's going to roll out more and more services and they continue to do more. And if you if you look at the broader travel opportunity, Airbnb is so far has just been in homes and there's a lot out there that that hasn't been part of their addressable market. And they're starting to move into that now. And that's the big opportunity for them. And Christopher, one of the things that really stuck out to me is what Igor was just sort of talking about there, but it was a specific metric that 35% of the Airbnb hotel customers then eventually went on to book home stays through Airbnb. As you look at this hotel opportunity, Igor highlighting they're only in 20 cities right now. Could this potentially become Airbnb's most important customer acquisition tool? It's it's quite possible. I think Airbnb is finding out that hotel bookings are a pretty good gateway drug into the broader Airbnb platform, whether it's looking at next step being a homestay booking or adding in things like rental cars or some of these experiences that some of the hosts put in as well. So I think it's all about for them to really continue to be able to compete with the likes of Expedia or Booking, bringing in more of these services, which management seems to be be doing. I think, you know, the valuation is improving as this company continues to grow and the earnings growth profile enhances, but it does hinge upon having very solid execution from from management. You know, from a technical perspective, we might have some overhead resistance at 180. That's the level the stock has flirted with in the past. And you know this big move today. I was just looking before we went on. We've got an RSI of about 77. So it could merit some caution here. But I think it's a great story on, you know, a resilient global consumer. And Airbnb expanding their Christopher was talking about it and experiences rental cars. We talked about hotels, grocery delivery. I think they even have luggage storage as an option here. Now, before the report, you had said that you didn't view experiences or services as being any sort of material impact or to these Q2 results. Now that we have the numbers, how are you looking at how these businesses could potentially become a meaningful contributor? Yeah. So we we change our mind on that a little bit based on the report. But the, the point for, for this is that this, this gets stacked over time. So the hotel opportunity is, is hitting and it's hitting faster than we expected. And I think that's a big positive. Again, when you think about the addressable market for hotels, it's been very small for them and they're starting to lean into this now. That's that's a big opportunity. And it's and it's a really strong signal to see that working out so far, so, so quickly. The other factors and management talked about this on the call as well. The other experiences and services, those those are going to be longer term contributors. Again, there's some good early signals they talked about. They call that rental cars in particular as seeing some good trends there. They were pretty excited about luggage store luggage storage. So something pretty basic, but something that, that that is a really valuable service that, that they've added. But they did call out that this is going to take time to roll out to multiple cities and become more, more, more impactful. But, but there's layers here. And I think that's what's exciting about it. All right. Well, the street excited today about Airbnb and the results were up 15.5% at 175.07 right now. Really appreciate you being with us to dive into these numbers, Eagle and Managing Director, Internet Eq