Airbnb: Setting The Stage (Ticker: ABNB)

This statement remains a Rorschach test for how you view the company.

“This was our highest growth quarter in more than two years. Nights and seats booked grew 10%, our strongest quarter in years. But what matters most is the momentum that we’re gaining. In a marketplace, reaccelerating growth isn’t as simple as stepping on the gas pedal. It’s more like turning a cruise ship. It takes time and discipline, and you don’t always see it from one quarter to the next. The acceleration that you’re seeing didn’t happen by accident. It’s a result of a deliberate path we’ve been on for the past few years.” - Founder & CEO Brian Chesky, Q4 2025 Conference Call

Five years after the IPO, you can feel the frustration mounting among Airbnb investors. Its share price is still down from its initial trading price, while S&P 500 Index investors have seen a total return of 100% over the period.

Founder Brian Chesky, along with the rest of the leadership team, hammers home the same talking points to investors each quarter. Geographic expansion. Product expansion (experiences and traveler services). A Loyalty program and advertising ambitions. AI Search? It’s just around the corner. We’ll get there eventually, everyone, just wait.

Look, on the one hand, I share in the frustration over Airbnb’s much-hyped expansion outside its core home-sharing business, which has so far shown little financial return. What exactly are they spending $2.35 billion in product development costs on every year?

On the other hand, its core business has a long runway to keep expanding globally, is protected by inflation, has best-in-class cash flow conversion, and a moat that can keep widening (no, I do not believe AI agents are going to kill the business). It is a wonderful asset.

At 26x EBIT, shareholders probably make out just fine despite multiple compression risks if we get high single-digit revenue growth in the core business, share repurchases, and margin expansion over the next decade.

But what if you trust in Chesky’s grand vision? If you do, then we might have a multibagger on our hands. One that – as the stock price today tells us – few investors actually believe in.

Today’s paid subscribers are receiving a quarterly update on Airbnb and my thoughts on the stock. I will cover:

• The building blocks for growth

• Can we trust the product expansion thesis? (Chesky’s vision)

• Underappreciated embedded earnings power

• Is there still an emerging moat?

• My investment decision

The building blocks for growth