Airbnb (NASDAQ:ABNB) was cut to Neutral from Buy at DA Davidson on Wednesday, with the firm maintaining a $145 price target on the stock.
Analysts cited the company's "neutral to normalizing" growth profile as one of the reasons for the downgrade.
"ABNB’s 4Q’23 results were solid, with decent upside vs. expectations on both the topline and adj. EBITDA," analysts wrote. "Management’s outlook commentary for 1Q and CY’24 suggests that this year may reflect a more normalized room night growth environment for ABNB however."
Analysts also said there is the potential for some modest year-over-year EBITDA margin compression due to long-term growth investments in areas like deeper international market penetration, marketing, and the AI/platform expansion.
With analysts seeing no positive revenue impact from Airbnb's new "beyond-the-core" expansion initiatives likely until 2025 and their expectation of a more normalized growth trajectory for ABNB’s core accommodations business, they expect "it may prove difficult for ABNB shares to maintain the magnitude of its valuation premium vs. peers."