Mizuho Lowers Airbnb Price Target to $170, Citing Aggressive Growth Expectations and Focus on Affordability

Mizuho analysts lowered their price target for Airbnb (NASDAQ:ABNB) to $170 from $175 while maintaining an Outperform rating on the stock.

The analysts highlighted several factors influencing the revised target: first, the projected 8% room night growth for Q4 2024 may be overly optimistic, particularly if shorter booking lead times, which moderated by 6 percentage points in July, persist. Second, Airbnb is expected to prioritize affordability and quality by introducing price tools, ensuring price parity, and removing lower-quality listings, which could lead to a deferral in advertising spending to support these initiatives. Third, while Airbnb's market expansion plans are expected to continue into fiscal 2025, the company is anticipated to improve efficiency in other areas to counterbalance potential margin pressures, with margins projected to remain flat year-over-year.

Although near-term estimates have been revised downward, the analysts remain bullish on Airbnb's long-term potential, citing the low penetration of the home accommodation market and significant growth opportunities in areas like Experiences and Advertising.