Airbnb Tentative Valuation

Dear Reader,


Here I am going to make an attempt to tentatively value Airbnb, Inc., the online marketplace for arranging or offering lodging, primarily places to stay.

There is no public data on financial statements of Airbnb which I can find. That said, I am going to use a requote of financials in www.businessinsider.com which quotes a Wall Street Journal article: https://www.wsj.com/articles/airbnb-swings-to-a-loss-as-costs-climb-ahead-of-ipo-11581443123?mod=searchresults&page=1&pos=1. The link can be found here: https://www.businessinsider.com/airbnb-reportedly-lost-money-in-2019-possibly-impacting-ipo-plans-2020-2

According to the Business Insider article quoted above, Airbnb posted a net loss of 322 million USD in the first nine months of 2019 through September, after making a profit of 200 million USD in the respective period the previous year. According to the original Wall Street Journal article Airbnb made 1.65 billion USD in revenue in the third quarter of 2019 alone, up 400 million USD from the year before first nine months period respective figure for revenue in Q3 2018.

What is the intrinsic worth of Airbnb? I estimate Airbnb to be worth around 25 billion USD in the next 1 or 2 years. I think a Price/Sales valuation of around 5 is adequate for Airbnb, given  that Airbnb is losing money. If Airbnb becomes profitable with let's say a net profit margin of 10%, then Airbnb could be well worth somewhere around 55 billion USD. But now, in my opinion the true intrinsic value of Airbnb is somewhere in the vicinity of 25 billion USD.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich