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Airbnb stock price has price has remained in a tight range in the past three months as concerns about its business remained. It was trading at $135 on Friday, down by over 20% from its highest swing in 2024. So, what next for the ABNB share price ahead of its earnings?

Airbnb earnings ahead

The Airbnb stock price has been in the spotlight as it continued to disrupt the hospitality industry. It annual revenue has moved from over $3.3 billion in 2020 to over $10.8 billion in the trailing twelve months.

A key concern is that its business is slowing. The most recent results showed that its third-quarter revenue rose by 10% to $3.7 billion. Its net income and adjusted EBITDA rose to $1.4 billion and $2 billion, respectively.

Airbnb will be in focus next week as it publishes its fourth-quarter results. Analysts expect these numbers to show that its revenue rose by 9.17% in Q4 to over $2.4 billion. If these analysts are accurate, it means that its annual revenue will be $11 billion, up bt 11.36% from a year earlier.

Airbnb has also become a highly profitable company as the management has focused on slashing costs over the years. 

The most recent numbers revealed that it had a free cash flow of $1.1 billion. FCF is one of the most important metrics because it considers all funds left after a company spends to grow its business. Firms use their FCF to either expand their operations and reward their shareholders.

Airbnb has historically used its FCF to reward its shareholders through share repurchases. It repurchased shares worth $1.1 billion in the last quarter and has about $4.2 billion remaining. The frm will likely continue buying back these shares.

Share repurchases reward investors reducing the number of outstanding shares, a move that increases thee earnings per share. In Airbnb’s case, the fully diluted share count dropped from 698 million to 665 million. 

A key concern about the Airbnb stock is that its valuation is not cheap as the forward price-to-earnings (P/E) ratio remains at 33.7, higher than the sector median of 19. The forward EV-to-EBITDA ratio of 6.8 is higher than the sector median of 1.27.

Airbnb stock price analysis

(Click on image to enlarge)

ABNB stock chart by TradingView

The weekly chart shows that the ABNB stock price remains significantly lower than its all-time high of $221.8. The decline is likely because the company has continued to face substantial competition from hotels and other vacation rental firms. 

On the positive side, the stock has formed an inverse head and shoulders pattern, a popular bullish reversal sign. The head section of this pattern is at $84, its all-time low. It is now in the right side of the H&S pattern.

Airbnb stock has formed a small bullish flag pattern. Therefore, the stock will likely have a strong rebound in the coming months. Most of these gains will be confirmed if it rises above the neckline at $150.

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