Airbnb is another tech unicorn that may IPO later this year, but unlike other companies in the sharing economy, it is in an enviable position given it is already profitable with a positive cash flow in the previous two years.

What’s more, Airbnb has grown its revenue at a quicker pace than former unicorns Lyft and Uber – both having launched on the stock market earlier this year – and faster than office space provider WeWork, who is also planning an IPO.

1 Estimated or achieved
2 Based on valuation

Latest valuations price Airbnb at a higher multiple of revenue than Lyft and Uber, but some investors believe this premium is warranted given it has already proven it can turn cash into profit, unlike Lyft and Uber who have no clear path to profitability.

Given that Airbnb does not need to raise cash to stay afloat, it is in no rush to sell shares to the public. The fact that its owners have refrained from diluting their own shareholdings should be taken as a positive signal. But it does mean that if the IPO is pushed back, investors may have to pay a higher price for Airbnb shares if the impressive performance continues.

There are concerns over the recent departure of the CFO – which may delay Airbnb’s IPO plans – and a cash management strategy that is reportedly less than prudent. What has been dubbed as an “internal hedge fund” is estimated to be generating around $5 million per month according to one report from Bloomberg. While a conservative stance towards cash management is favourable, the fact that such a young company has cash available to invest should be seen as a plus.

When is Airbnb’s IPO?

One of Airbnb’s co-founders, Nathan Blecharczyk, has said that Airbnb has taken the necessary steps to go public this year, but that it does not want to go ahead quite yet. The ‘no rush’ mentality is seemingly because the company does not need a major cash injection to stay afloat. It is may also be reluctant to proceed after its Chief Financial Officer resigned in February 2018 due to internal tensions.
 
What is Airbnb likely to be valued at when it lists?

According to internal valuations, Airbnb is likely to be valued at around $38 billion when it lists. This surpasses a previous valuation of $31 billion. However, this figure may be distorted due to media hype, and it may not reflect the true value of Airbnb stock to the customer.

When the Airbnb listing is confirmed – and if the valuation remains unchanged ­– Airbnb will have one of the largest market caps in the hotel and online travel agency industry. TripAdvisor is currently valued at $7.4 billion, Expedia at $18 billion, while Booking.com takes the lead at $80 billion.

(Source)