Airbnb’ s share price has decreased from $170.10 at its 52-week high to $117.38.

Is there a buying opportunity ?

Let’s look at Airbnb’ s balance sheets.

Airbnb’ s total assets were $26.3 billion as of June 30, 2024, up from $20.6 billion as of December 31, 2023.

Total current assets were $22.3 billion as of June 30, 2024, accounting for 84.8% of total assets.

Of total current assets, cash and cash equivalents were $7.9 billion, short-term investments were $3.37 billion, and funds receivable and amounts held on behalf of customers were $10.3 billion.

Total liabilities were $18.3 billion as of June 30, 2024, which is well-covered by the amount of total current assets.

With strong cash flow, the company has a low level of debt.

Profitability

Revenues were $4.3 billion and $4.89 billion in the six months ended to June 30, 2023 and the six months ended to June 30, 2024.

Net income was $767 million and $819 million in the six months ended to June 30, 2023 and the six months ended to June 30, 2024.

Cash Flow Analysis

Net cash provided by operating activities was $2.5 billion and $2.97 billion in the six months ended to June 30, 2023 and the six months ended to June 30, 2024.

Stock-based compensation expense was $544 million and $677 million n the six months ended to June 30, 2023 and the six months ended to June 30, 2024.

Conclusion

In 2023, net cash provided by operating activities was $3.88 billion, including $1.12 billion in stock-based compensation.

Cash flow after stock-based compensation was $2.76 billion in 2023.

We reckon that cash flow after stock-based compensation is about $3 billion in 2024.

Now, Airbnb’ s market price is $75.3 billion, which is about 25 times its cash flow after stock-based compensation.

Based on current performance, Airbnb’s reasonable valuation is around $70 billion, but Airbnb’ s market  price may still decline.

Disclaimer: The content is for reference only and does not constitute investment advice.