Jake Ruth
Product Engineer at PostHog, Co-Founder of Stock Unlock (YC W22), AI Engineering
Airbnb's future potential and execution matter more than its past: it has an amazing founder, an extremely wide moat, rapid innovation and many levers to keep raising revenue. It also consistently generates 30-45% free cash flow margins, and growth has been quietly accelerating over the last few quarters. x.com
Airbnb may have found its stride, and in a period of rapid change it pays to back the companies that are executing. On the Q2 call, CEO Brian Chesky said the company is innovating faster than it ever has. x.com
Airbnb's cash-flow story should drive a run in 2026-2028 like Uber's, which climbed from $19 to $80 between 2022 and 2024. x.com
Airbnb is definitely not undervalued, because growth is slowing and there is likely little margin expansion to offset the revenue deceleration. It trades at 15x NTM EBITDA and 28x NTM EPS, with EBITDA expected to grow at a 12% CAGR and EPS at 19% over the next 2-3 years. The chart would get a little interesting above $144 on the daily, and very interesting if it breaks the downtrend from its all-time high more than five years ago. x.com
Airbnb's long underperformance is ending: it was too expensive at its IPO and has had to work through and digest those expectations, which is about to change. x.com
Airbnb is heading toward becoming an AI-native travel platform with inventory nobody else has. Q2 gross booking value rose 16% year over year, with $27.2 billion of bookings, as experiences and services attach to the core and hotels gain traction. As shoppers move to AI-native search, Airbnb's largely non-commodity inventory positions it well, and adding commoditized hotels and car rentals lets it connect trips end to end. x.com x.com
Airbnb is a value trap. The stock has been flat for five years, and signs of the promised revenue acceleration from new products are limited. Now CEO Brian Chesky is starting a new AI lab to develop models while remaining CEO, per @negligible_cap, a side project that shareholders should find annoying. x.com x.com
Booking Holdings' buybacks keep increasing each shareholder's ownership share every quarter without any additional purchases. x.com
Booking Holdings and Expedia look like a secular short with capped upside as their take rates come under pressure, though probably not within the next 60 days. As with Salesforce, the argument that they could simply run headless will be raised, and the market knows it from SaaS. Take rates should compress first where barriers to bringing inventory online are lowest; the platforms would then respond with aggressive marketing and margin dilution, extending their growth runway somewhat. x.com
Airbnb is expensive against its cash earnings, trading at 36x, and 30x next year's, while the industry usually gets 12x. Fair value sits around $74.72 to $95.10, about 12x next year's cash earnings give or take 12%, so the stock is priced 94% above fair. This is a levels-only read off reported earnings and revenue estimates, with no fundamental work. x.com
Marriott and Hilton are toll booths on a global travel boom, capturing most new hotel growth without owning hotels. Royalties on 19k hotels need near-zero capex, and loyalty programs, 20-30-year contracts and lenders' demand for a major brand flag drive 4-7% unit growth against 1-2% supply. Hilton's fees, about 95% of EBITDA, rose from $814M in 2009 to an estimated $3.7B in 2026, a 10% CAGR on minimal capital. Buybacks and operating leverage compound EPS 11-14%. x.com x.com x.com x.com