Is The Market Underpricing Airbnb Stock

Airbnb (ABNB) stock trades at 38.3 times its earnings over the four quarters to fiscal Q2 2026. This valuation sits above the 28.3 average recorded at quarter-ends over the last twelve fiscal quarters, excluding readings above 100. Investors paying this premium may be betting that the company will continue to add guests and keep more of each booking as profit. If Airbnb does both, would the business be worth more than buyers pay today?

Airbnb's Business Could Be Worth More Than Today's Price

Under our assumptions, Airbnb stock would reach about $241.20 a share in three years, compared with $174.28 at the October 15, 2026 close. That represents a 38.4% upside. This scenario assumes the P/E falls to 32.6. We apply a target multiple of 0.85 times the current P/E because the current P/E is more than 1.15 times the stock's own average.

The table below compares current metrics with projections for the scenario three years out.

Revenue growth drives more than the entire projected gain. The model assumes revenue increases 12.3% a year, representing 0.9 times Airbnb's pace over the latest twelve months. Meanwhile, the financial benefit from a wider net margin is slightly smaller than the drag from a lower P/E.

Airbnb has maintained its growth trajectory so far. Management raised its fiscal 2026 outlook to at least mid-teens revenue growth, a few points above our modeled pace. During the August 6, 2026 earnings call, executives reported a 10% increase in nights and seats booked. This marked a faster rate than the company saw in fiscal Q1 2026. Hotel nights remain a single-digit share of total nights booked. Yet, they are growing about three times as fast as home bookings.

CEO Brian Chesky said on the same call that policy is a risk, but not an existential one. One month later, TechXplore reported EU plans to grant European cities more leeway to curb short-term rentals.

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Can Airbnb Keep More Of Each Booking As Profit?

That has not happened yet. Airbnb recorded a net margin of 20.4% over the twelve months to fiscal Q2 2026, down from 22.7% a year earlier. Our model assumes this figure will reach 23.5% in three years. We calculate this by assigning a 70% weight to the current margin and applying the remaining weight to the 30.7% historical average across the last twelve quarter-ends. That historical average includes four readings above 46%.

The company indicates that customer support is becoming cheaper. Customer support costs per booking fell about 16% in fiscal Q2 2026 compared with a year earlier, helped in part by an AI assistant. Management also raised its fiscal 2026 guide for adjusted EBITDA margin, a non-GAAP profit measure, to at least 35.5% from 35%. However, executives expect that margin to drop slightly in fiscal Q3 2026 from a year earlier because of the timing of investments.

How Does Airbnb's Upside Change In Different Scenarios?

The table below illustrates the potential upside when a single assumption changes while all others match the base scenario.

The projected upside shrinks only in the scenario with slower revenue growth. Conversely, the projection using the average margin yields a high return because that historical average includes readings as high as 56.9%. Airbnb posted that reading in the twelve months to September 30, 2023, when the operating margin was 23.4%. That reading reflected a one-time $2.9 billion tax benefit rather than operations; in fiscal 2023, net income was more than three times operating income.

Holding all other assumptions steady, investors would see zero return over three years if Airbnb's revenue growth slowed to about 0.7% a year. This compares with a 13.6% growth rate over the twelve months to fiscal Q2 2026. The stock would also generate no return if the net margin fell to 17.0% three years out, compared with 20.4% today. A drop in the P/E to 23.5, down from 38.3 today, would yield the same flat result.

Airbnb continues to increase its revenue each year. Yet, the company has not yet converted more of those sales into profit. Investors should watch the net margin over the twelve months to fiscal Q3 2026. The company is expected to release that figure in a report due on or around November 5, 2026.

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Any gain in Airbnb from here depends on the business delivering more. When the advisor who built your plan moves on, it is a natural moment to ask whether the plan still fits the life you have now. Glenn Caldicott, CIO of our Boston-based partner firm Empirical Asset Management, an SEC-registered investment adviser, offers a free review of your holdings, fees and income plan.

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