Airbnb Inc (NASDAQ:). stock is down 9.1% the day after the company’s second-quarter earnings report. The company beat on the top and bottom lines with earnings per share (EPS) of $1.03 and revenue of $3.10 billion. Those numbers were year-over-year (YOY) gains of 19% and 12% respectively.
But headline numbers show where a company has been, not where it’s going. In the case of Airbnb, the company delivered tepid guidance for the coming quarter.
Management’s Q3 revenue guidance of $4.02 to $4.1 billion represents about 8% year-over-year growth, a deceleration from the 12% the company just reported in Q2. It also seems to confirm that the economy may not be as strong as expected and suggests that investors may not want to buy this dip.
A Canary in a Coal Mine
The July Jobs report released on Aug. 1 challenged the assumption that the US consumer was holding up well. But the performance of consumer discretionary stocks in 2025 has made some investors skeptical of that outlook. A research report from Bank of America (BofA) hints that this may be a time for investors to trust their intuition.
In its July Consumer Checkpoint, BofA presented data showing consumer spending on services (including hotels, airfares, and dining) has declined for three straight months. One part of the report noted, “Discretionary services spending, particularly in travel, appears to be contributing negatively to services growth.”
It’s Getting Hard to Buy Airbnb’s Growth Story
Airbnb’s chief executive officer (CEO), Brian Chesky, was quick to tell analysts that the company was not satisfied with slow growth, saying, “We want the company to accelerate.” However, it’s fair to say that the call didn’t point to specific initiatives that would make this happen.
For example, in discussing the company’s artificial intelligence (AI) investments, Chesky remarked that Airbnb continues “to explore how we can use AI to improve the guest and host experience, but we’re still early in identifying the most impactful use cases.” In discussing the potential opportunity in business travel, the CEO told analysts the company was “looking at ways to make Airbnb more compelling.”
There were other examples, but a common theme on the earnings call was one that was non-committal without a product roadmap or a specific strategy outlined. It’s also a reminder that the reason to stay at an Airbnb property is not the same as the decision to buy ABNB stock.
Popular Brand, Weak Momentum
Many consumers swear by the home rental model and will never return to a hotel. The model works for many individuals, groups, and families, particularly those for whom the “where” is a key part of their vacation plans.
But does that mean ABNB stock is a good investment? Right now, slowing growth shows a mature company finding it tough to innovate.
For example, the company announced a new share repurchase program of up to $6 billion, which is generally positive for shareholders.
However, at 30x forward earnings, ABNB is valued as a growth stock forecasting high single-digit growth, which makes it appear the company’s best days are behind it.
The Bears Are in Control; Bulls Will Need Patience
The post-earnings sell-off has given investors the potential for more upside in ABNB stock. The consensus price target of $143.07 provides about 20% upside. However, several analysts have lowered their price targets since earnings. Investors looking to buy the dip may look at a $115 price target, but stronger support is more likely to be around $110 or even $100.
But before taking action, investors will want to wait for other signals to confirm. For example, the sharp drop in the stock price pushed the MACD line below the signal line, and the chart shows that momentum is becoming increasingly bearish.
The daily volume is more than double the average daily volume, showing that investors are selling first and asking questions later.
This means that patience will be required before timing an entry. The 50-day SMA is flattening and starting to curl lower, putting the stock close to a bearish death cross formation that occurs when the 50-day SMA crosses below its 200-day SMA.
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=[];t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)[0];s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);
