In the end, I decided not to buy Airbnb (NASDAQ: ABNB) contributed a year ago, when it was circulated at a price to profit (P/E) Complications of 17. But by P/E of 30 … I just became interested.

This seems meaningless, but carry with me. Although the share price increased by 5 % in the past 12 months, I think the stock is actually a much better value today than it was a year ago.

What happens?

A year ago, Airbnb’s profits per share were strengthened with one time tax gains from the third quarter of 2023. As a result, it was much higher than they might be usually.

By compensation for excessive cash compensation and shares -based compensation, shares were traded in a free monetary flow of about 24. In other words, it was more expensive than the P/E implicit percentage.

Quickly forward and I think the situation is different. The price increased by about 5 %, but the basic work was growing.

As a result, complications have not changed largely from the place it was a year ago. As interest rates drop, I think the stock is worthy of appearance.

Q2 profits

Airbnb’s share price decreased by 10 % this week after updating the company Q2. 11 % increase in reservations means that sales were 13 % higher than the previous year, and the share profits increased by 16 %.

These numbers – in my opinion – are very encouraging. The growth of the company’s revenues has been inspiring during the past four quarters, but the growth of 13 % shows the acceleration.

The reason for the decline in shares, Airbnb announced an investment of $ 200 million in new initiatives. This includes the renewed experiment department, and is scheduled to affect the margins in the third quarter.

The company sees an investment, but the stock market considers it differently. It is easy to see why investors may be skeptical at the present time.

Experiences

Airbnb has tried the experimental section before – it was not a great success. The platform offers were often of uneven quality, limited in number, and badly announced.

So it is completely understood that investors may be cautious about the company again trying on a larger scale. Especially if this means large capital expenses in the front.

One of the main attractions in Airbnb is the model of origin light, which leads to strong cash generation. So the great critical commitment is something likely to solve the shareholders.

The big question is whether the hosts who have previously experienced experiences will return to the platform. But CEO, Brian Chisky, stated in the profit call that the interest was already strong.

This time is different?

The investors who are running QUIZZical around Airbnb after going on a previously uncomfortable project that justifies it. But I believe that the 10 % decrease is a chance worth considering.

In light of the weak guidance, it is easy to overlook the fact that the growth of the company’s revenues is accelerating. In my opinion, this makes it worth looking at today’s prices.

A year ago, I believed that the P/E 17 percentage made the shares more cheaper than it was. Today, I think the P/E of 30 deformation is the value equation in the opposite direction.