Post-Pandemic Travel Trends Make This Player a Continued Winner

The pandemic is largely over in the United States and around the world, as many cities, states and countries have started dropping mask and social-distancing mandates that have marked nearly two years now.

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  • Already, travel trends have pointed to a recovery in that sector, with further room to go before getting to pre-pandemic levels. That will likely accelerate as plans for Covid passports and other restrictive measures to travel now appear unlikely. But one clear winner is already emerging.

    The company? Airbnb (ABNB). The company matches hosts with those looking for spaces, and can provide anything from a one-night accommodation to a multi-month stay. It’s becoming a post-pandemic winner thanks to travel and short-term rentals in many markets where housing demand remains hot.

    That’s allowed the company to see revenues surge 78 percent compared to a year ago for short-term rentals, driving an overall revenue growth of 38 percent to $1.53 billion. That’s helped shares recover most of the ground they lost since a short-term peak in November.

    Action to take: In addition to better-than-expected growth, earnings are up 280 percent compared to a year ago. While the company is still reporting losses, those losses are starting to narrow. Investors now could be rewarded with excess returns by the time the company does start posting a profit.

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  • For traders, a continued move higher in shares looks likely, given the double-winning trends of a strong short-term rental market and increased travel demand. The May $210 calls, last going for about $9.20, look poised for further gains in the months ahead.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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