The recent pullback in Airbnb creates an attractive entry point for investors looking to buy a quality growth company, according to Bernstein. Analyst Richard Clarke believes that the recent share price weakness presents a compelling opportunity, as concerns of a bear market have been discredited following second-quarter results. Clarke sees a potential upside of over 30% with an expected acceleration in the second half of the year, as competitors begin to slow down and new revenue announcements are made in 2024.

Shares of Airbnb have declined by 13% since the beginning of the month, even though the company posted second-quarter results in line with expectations and raised its average daily rate and margin guidance. However, for the year, shares have still experienced a strong rally of about 55%. Despite the recent stumble, Clarke remains optimistic about Airbnb’s long-term prospects. He believes that the company has a strong competitive advantage, multiple growth opportunities, and is experiencing rapid growth in both its top and bottom lines.

Clarke acknowledges that Airbnb may appear expensive in the near term, but when considering the potential increase in revenue from additional opportunities, he believes the shares are “increasingly cheap”. He compares Airbnb to Booking Holdings and suggests that Airbnb’s free cash flow yield should align with Booking Holdings by 2024 and surpass it by 2025.

Overall, Bernstein’s analyst sees Airbnb as a quality growth company that currently presents an attractive entry point for investors.

— ‘s Michael Bloom contributed reporting