Only one-third of more than 20 analysts who put out reports on Airbnb at the beginning of 2021 expect the stock to see gains from its current valuation.

After much anticipation, short-term rental giant Airbnb made its public debut in December with a splash. Over the course of the month, the company’s stock price more than doubled, and Wall Street analysts have now indicated their doubts for the stock to grow much further, according to a report by CNBC.

In fact, only one-third of more than 20 analysts who put out reports on Airbnb at the start of 2021 expect the stock to see gains from its current valuation.

Airbnb began selling shares at $68 during its debut, and in the first day of trading, those shares soared a whopping 113 percent to close at $144.71. As a result, the company earned a value of $86.5 billion, or more than $100 billion, based on a fully diluted share count. However, since then, the stock has remained relatively flat until Monday when it dropped 5.2 percent to $139.15.

At the start of the year, more than 20 analysts began coverage of Airbnb, according to FactSet and CNBC. While about two-thirds of those analysts recommend holding the stock, five out of 18 analysts with price targets anticipate the company’s shares will drop.

Deutsche Bank and Stifel issued the most bearish reports, placing targets of $130 on the company’s stock. Stifel attributed that estimate to a discounted cash flow analysis for Airbnb that incorporated both cost of capital and growth rate factors.

At the opposite end of the spectrum, however, Needham had the most bullish report, estimating the company’s shares to reach $200 in the next year. That estimate, Needham analysts said, was based on the prediction that the alternative accommodation market could grow by five-fold to ten-fold between now and then, and may likely benefit from pent-up demand for travel in the wake of the pandemic.

“Key upside drivers would be accelerating share gains in the U.S. and COVID abating sooner than expected in ’21, in our view,” Needham analysts wrote in their report. “Our primary downside concerns are COVID turning into an incremental multi-year headwind and/or stagnating traffic growth that would cause the company to invest more aggressively in customer acquisition, presumably through Google.”

Email Lillian Dickerson

IDX Real Estate