Now might be the right time to invest in Airbnb

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One of the most high-profile tech companies in the world has disappointed investors so far. Investors had high expectations for Airbnb ($ABNB), which is why its valuation more than doubled virtually overnight on its IPO day back in 2020. The company’s stock price skyrocketed 112% on debut and closed the day at $144.71. Fast forward nearly 4 years and shares still trade below the first-day close.

ABNB stock has officially underperformed the market by a wide margin. But this is actually a typical pattern for stocks that skyrocket on the first day of trading, making them bad investments for the first couple of years.

After years of choppy trade, Airbnb’s valuation finally reflects its current fundamental performance and future growth prospects. In fact, the stock probably looks undervalued as the market hasn’t priced in the upside potential from all of the company’s growth initiatives, some of which might result in billions of new revenues in the coming years. Let’s take a deeper dive.

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