We turned cautious on Airbnb, Inc. (NASDAQ:ABNB) stock in our April article after our bullish calls in November 2021 and February 2022. We realized that ABNB stock had struggled to gain momentum, despite its solid underlying performance. We were also concerned that its ADR tailwinds could be wearing off by the end of 2022, impacting its revenue and profitability growth.
Furthermore, ABNB stock was still priced at a steep premium that we thought couldn’t justify its potential ADR headwinds. As a result, despite robust FQ1 results, the stock fell steeply in May before consolidating at its near-term support.
Our valuation analysis suggests that ABNB stock is no longer overvalued and seems pretty fairly priced. However, our price action analysis has not indicated a potential bear trap reversal signal. Furthermore, its recovery momentum remains tentative, hindered by its near-term resistance.