– Airbnb – is a good long-term investment opportunity at 20x normalized earnings.
– Although loss-making currently, it’s a capital-light business with increasing margins and continued growth.
– Set to turn into a compounder when normalized profitability is reached.
– Expected operating margins of 28% (vs -20% currently) and a net margin of 20% to be reached within 5 years.
– Steady-state earnings of around $3.1 bn on revenues of $14.7bn a few years out.
– Assumes 20% CAGR p.a.
– Trades at 20xPE on steady-state earnings.
Exp. gain: Not specified.
Full $ABNB write-up (free guest account required):