Airbnb is expected to report earnings of $0.25 on revenue of $1.86bn for the past quarter. Key support sat at $106.53 and key resistance sat at $113.73.

Overview

Airbnb, Inc. is an American company with headquarters in San Francisco. It runs an online marketplace for experiences and short-term homestays. The business serves as a broker and takes a commission from each reservation. Airbnb is a condensed form of the website's original name, AirBedandBreakfast.com.

Financials

Taking a look at the company’s income statement, in 2021, it reported around $6bn in revenue and $4.8bn in gross profit. Roughly a 77% and 93% increase year on year, respectively. After-tax and operating expenses, profit came in at $-352m, even though it is a negative figure, it’s still a huge improvement from the previous year where profits came in at a loss of $-4.5bn. As a result, the earnings per share for 2021 sat at $-0.57 versus $-16.12 in 2020. Over to the balance sheet, $8.3bn was recorded in cash on hand, which is the most it’s ever been. Furthermore, total assets have risen by over $3.2bn whereas total liabilities only rose $1.4bn. This was because taking on long-term was kept at a minimum and the growth among current assets was positively greater than in liabilities. Boosting the value of the company’s equity to $4.7bn from $2.9bn.

Technicals

From a technical viewpoint, we can see that at this moment in time, Airbnb’s stock is trading at around $109.55 a share. Technically, the bullish momentum from the start of the year remains in place, but there has been a slight retracement which formed last Thursday and was confirmed the following day. The price on Friday fell to as low as $106.53. Further support levels sit at $107.00 (lower Bollinger) and then the key level at $106.53. A break and close below $106.53 may see the price decline lower, aiming as far as $100-$102. Although, this is more likely in the mid-long term.  Currently, it is trying to find a consolidation point before potentially climbing higher again. Therefore, resistance points sit at $110.63 then at $112.05 then at $113.73. A break above $113.73 would see a further test, which is currently sitting at $114.95 (middle moving average). Both the MACD and RSI are negative at the moment with an RSI reading of 35.

Summary

On the basis of the financials of the company, they have made major improvements to their sheets year-on-year. However, the Covid slump affected almost everyone, so the setbacks are totally understandable. Nevertheless, even though the figures are much better now, they are still operating at a negative net income but certainly heading in the right direction. The numbers suggest that next year should see a positive income, especially to the surge of travel throughout 2022 prior to recession fears. At present, the technicals suggest more positivity but investors should be wary as sentiment could change drastically after Airbnb’s earnings report tomorrow. It’s expected to report an EPS of $0.25 on revenue of $1.86bn for the past quarter (after market close). The bulls seem to have control for now but tomorrow will provide more insight into the price of the stock in the near future.