- Airbnb < ABNB> stock is likely to revisit $200 sometime in the near future.
- An imminent event could provide a defining moment for the shareholders.
- Investors should be cautious and patient as Airbnb needs to move toward profitability, not away from it.
San Francisco-based home-sharing network Airbnb < NASDAQ:ABNB> claims to offer the future of travel. Yet, we can't predict the future and it's wise to wait just a week or two before purchasing ABNB stock.
Sure, the macro environment for a home-sharing business is better than it was a couple of years ago. Now that many people are vaccinated against Covid-19, travel is much easier and that's great news for Airbnb.
Heck, one notable analyst even seems to suggest that Airbnb could be a recession-resistant business. This is a comforting thought for ABNB stockholders, no doubt.
On the other hand, it could be hasty to take a position in the stock today. An impending financial announcement could be make-or-break for Airbnb, and the bottom-line results will be of paramount importance.
What's Happening with ABNB Stock?Without a doubt, $200 is the resistance level to watch when it comes to ABNB stock. Frustratingly, the stock hit $200 multiple times last year before dropping.
Even now, the share price continues to wobble between $130 and $200. Resistance levels are meant to be broken and patience is a virtue, but it's understandable if Airbnb's investors are feeling a bit frustrated.
As the investors await their breakthrough moment, Citigroup analysts have offered some encouragement as they've identified ABNB stock as a top pick. This is meaningful, as many investors are hesitant to buy Nasdaq-listed stocks or anything involving technology.
That's because Nasdaq-listed stocks may be vulnerable in a year when the U.S. Federal Reserve is likely to raise interest rates. Some people might even anticipate an economic recession in 2022.
Yet, Citigroup analyst Ronald Josey doesn't seem particularly worried about this possibility. “Should a (mild) recession occur we believe its impacts are likely to be manageable,” he wrote.
Josey added, “The broader sector is healthy as consumer engagement online continues to be more immersive and grow.” The implication, apparently, is that Airbnb and other Internet-related businesses should be able to ride out a mild recession if it occurs this year.
An Important DatePerhaps Josey's words have given you a boost of confidence when it comes to ABNB stock. Indeed, maybe you're tempted to load up on the shares today.
This is a time for caution, though, not haste. All eyes will be on Airbnb very soon as the company plans to release its first-quarter 2022 fiscal results on May 3.
That's not far away, and if you've waited to take a position in ABNB stock, you can wait a little bit longer. For all we know, the share price could zoom higher or it could drop like a rock after the quarterly data is released.
One thing you'll want to pay close attention to is the bottom-line results. Bullish-leaning traders will definitely want to see a net earnings gain, not a loss for the quarter.
Granted, Airbnb posted $55 million in net income for 2021's fourth quarter. That's impressive, but there's a bigger-picture narrative we should also pay attention to.
Unfortunately, for full-year 2021, Airbnb reported a net earnings loss of $352 million. In other words, the investors will want to know whether the fourth-quarter 2021 net earnings gain was a fluke, or part of an enduring positive trend.
What You Can Do NowJosey's encouraging words might spur some folks to buy ABNB stock immediately. However, patience could prevent heartache if the stock drops after the upcoming earnings release.
Therefore, it's wise to stay out of the trade for now. Check the bottom-line data after the numbers are announced, and consider a position if Airbnb maintains a profitable financial profile.
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On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content - and crossed the occasional line - on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
ABNB shares were trading at $156.80 per share on Monday morning, up $0.71 (+0.45%). Year-to-date, ABNB has declined -5.82%, versus a -11.48% rise in the benchmark S&P 500 index during the same period.
About the Author: David Moadel
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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