UBS lowers Airbnb stock price target to $148 on growth concerns

Airbnb (ABNB) shares declined premarket despite Q2 2025 earnings exceeding expectations, as analysts expressed concerns over decelerating growth and potential market share loss. UBS lowered its price target to $148, citing Airbnb's 7% Nights and Seats growth lagging Booking's 8% and revised EBITDA forecasts, while Wells Fargo also reduced its target, highlighting slower core market growth. This indicates investor focus on competitive dynamics and future growth trajectory despite strong current profitability.

Analysis

Despite Airbnb (ABNB) reporting a second-quarter 2025 earnings and revenue beat, with EPS of $1.03 surpassing the $0.93 forecast and revenue reaching $3.1 billion against a $3.03 billion estimate, the market's focus has shifted to concerns over its growth trajectory and competitive positioning. The primary issue is the 7% year-over-year growth in Nights and Seats, which lags behind the 8% growth reported by its larger competitor, Booking (BKNG). This has intensified concerns about market share erosion, underscored by a UBS note stating that Booking's alternative accommodation nights have reached approximately 85% of Airbnb's volume. Consequently, analysts have revised their outlooks downward; UBS lowered its price target to $148, citing a 3% and 1% reduction in its 2026 and 2027 Adjusted EBITDA forecasts, while Wells Fargo trimmed its target to $110 on slower core market growth. While the company's fundamentals remain robust, evidenced by an 83% gross profit margin and $4.4 billion in free cash flow over the last twelve months, the negative stock reaction and analyst downgrades indicate that future growth expectations are currently outweighing strong historical profitability.

Key Decisions for Investors

• Investors should prioritize forward-looking growth metrics, such as Nights and Seats booked, over historical earnings performance, as the market is clearly penalizing the company for decelerating growth relative to peers.
• Closely monitor the competitive dynamics with Booking (BKNG), as continued market share loss in the alternative accommodation space could lead to further compression of Airbnb's valuation multiples.
• Evaluate whether growth in expansion markets like Brazil and Japan can sufficiently offset the noted slowdown in core markets to justify the company's elevated valuation multiples.
• Consider the downward revisions to Adjusted EBITDA forecasts by analysts, as these future profit estimates are a more direct driver of price targets than the recent backward-looking earnings beat.