Airbnb Q3 earnings on deck: Focus on bookings amid slow U.S. demand

Airbnb (NASDAQ:ABNB) is set to announce third quarter earnings on Thursday, and investors will keep an eye on bookings, amid the vacation rental company’s warning of a slowing demand in the United States.

Wall Street expects San Francisco-based Airbnb to post quarterly EPS of $2.15, while revenue is expected to rise nearly 10% to $3.72B.

Airbnb has been seeing soft demand for domestic travel in the U.S. since the start of the year, as people are cautious about spending money on vacations in a soft economic environment.

The company, in August, issued a weak outlook for Q3 and said it is seeing some signs of slowing demand from U.S. guests and shorter booking lead times globally.

Booking lead time is the number of days between when a guest makes a reservation and the date they check in.

“We are concerned that incrementally cautious guidance could pressure Street estimates for a 4Q24/FY25 re-acceleration in Nights growth and further support the narrative that travel demand is decelerating,” said Jefferies analyst John Colantuoni.

Seeking Alpha analyst Luca Socci called Airbnb’s Q3 earnings “a bit dangerous”, adding that a “small downtick in its main – and healthy – financials and KPIs could send the stock back to $110 or lower.”

Market watchers will also look into the company’s margin and updates on future investment for any potential expansions.

Earlier in September, as per a Reuters report, Airbnb CEO Brian Chesky told the company is focused on growing its long-term rental business, which refers to stays of 28 days or longer.

Meanwhile, Airbnb is positive about the strength of its business in Latin America and Asia Pacific. The company, in September, disclosed that it has reached 2 billion guests.

Investors were encouraged by peer Booking Holdings’ (BKNG) quarterly results in October, which showed a strong performance in Europe.

“While Street is expecting a few points of nights deceleration in Q3, we’d also note that it is looking for 1-2 points of acceleration in Q4 which we think appears achievable, provided it captured some of the marginal rebound,” said RBS analyst Brad Erickson in a note on Airbnb.

Wall Street, Seeking Alpha analyst and Seeking Alpha’s Quant Ratings are cautious and rated the company as a Hold.

Over the last three months, EPS estimates have seen no upward revisions, compared to 11 downward revisions, while revenue estimates have seen one upward revision versus 31 downward moves.

The stock has gained nearly 3% so far this year, compared to the nearly 21% rise in the broader S&P500 Index.