Key Takeaways
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Airbnb shares jumped 11% after third-quarter revenue grew 19% and the company raised its full-year outlook.
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Airbnb expects 16% to 18% revenue growth in the fourth quarter, far ahead of Booking Holdings and Expedia.
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AI now handles about 40% of Airbnb's support issues without a human, and outside AI agents bring it very few bookings so far.
Airbnb ( ABNB:NASDAQ )shares soared 11% today after third-quarter revenue grew 19%.
That's well ahead of Booking Holdings ( BKNG:NASDAQ )and Expedia Group ( EXPE:NASDAQ ). Earlier this week, both guided to low-to-mid single-digit revenue growth for the fourth quarter.
CEO Brian Chesky gives AI a lot of the credit. "I think AI is the best thing that ever happened to Airbnb," he told Jim Cramer on Mad Money Thursday night.
What exactly happened
Here's what Airbnb reported after Thursday's close:
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Revenue of $4.9 billion, above the $4.75 billion analysts expected
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Fourth-quarter revenue guidance of $3.22 billion to $3.28 billion (16% to 18% growth), above the $3.16 billion consensus
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Full-year revenue growth now expected in the high teens, up from the mid-teens
Before the report, analysts expected $14.2 billion of revenue this year.
The new guidance gets me to about $14.4 billion for 2026, so I'd expect this year's and next year's estimates to go up.
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The growth gap is widening
Airbnb's rivals are heading the other way.
Booking expects 0% to 2% adjusted revenue growth in the fourth quarter, after 9% in the third. That outlook assumes the Middle East conflict keeps disrupting travel through the end of the year. So is Booking slowing because of the conflict, or because it's losing share to Airbnb?
Expedia grew third-quarter revenue 12%. But revenue from its consumer side, which includes Vrbo, grew just 6%. It expects 4.0% to 5.7% growth in the fourth quarter. Expedia doesn't report Vrbo separately, so how much of that 6% is Vrbo carrying?
Cheaper support, and few agent bookings
In the third quarter, about 40% of Airbnb's customer support issues were resolved without a human, and support cost per booking fell more than 17%.
On the call, Chesky said of outside AI agents: "We're not seeing a lot of traffic, and even fewer bookings from Muse and Instinct yet."
Still below its usual multiple
At Thursday's close, Airbnb traded at 30x forward earnings. Its five-year average is 50x.
After today's jump, it's in the mid-30s, still below that average.
I think that's a fair price for a company expecting several times its rivals' growth. Of course, about two points of the fourth-quarter guidance comes from currency, and Airbnb's own AI agent won't start rolling out until the first half of 2027.
So what is Airbnb stock actually worth?
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