$ABNB going up on hopium; Fair value $100-120

- ABNB gave hopium of investing in different business for next 5 years which could grow into a billion dollars.

- Investors should not fall for hopium. Execution remains a challenge and money spent on that bet remains unseen and just a wild dream as of now.

- EPS growth of ABNB is almost flat for next 2-3 years.

- Hotel industry has caught up to ABNB. There's no USP ( unique selling point ) of ABNB. Verbo offers exactly the same thing which ABNB does.

- Tons of listing have cannibalized net revenue for the host.

- Short term rentals have caused havoc in the rental market for the long term tenants.

Fundamentals wise:

Year | 2025 | 2026 | 2027 | 2028
EPS | 4.37 | 5.05 | 5.99 | 7.37
EPS growth % | 9.89% | 15.65% | 18.68% | 22.94%

For a company growing eps mid to high teens deserves a fair forward multiple of 20.

Year | 2025 | 2026 | 2027 | 2028
Stock price w p/e 20 | $87 | $101 | $119 | $147

However, many investors would be okay paying 25 times for a company with strong brand so.

Stock price w p/e 25 | $109 | $126 | $149 | $184

Bull Case:
Stock price w p/e 30 | $131 | $151 | $179 | $221

Recommendation:
Staying on the sidelines and waiting for the stock to disappoint and buy it close to instrinsic value represented by fundamentals