Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Wish IPO Valuation Analysis: Focus on Price Is a Double-Edged Sword

The Top 10% & Bottom 10% Insights in 2020

Airbnb IPO Preview - "It Is All About Trust"

Airbnb Pre-IPO – Travelling Down an Actual Path to Profitability

Equity Capital Markets

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<strong>Our base case valuation of Airbnb suggests an EV of $39.7 billion, an implied market cap of $45.0 billion, and an implied price per share of $64.3 per share, which would represent a 29% upside from the high end of the IPO price range of $44 to $50 per share.</strong> Given the attractive upside, we have a positive view of the Airbnb IPO. Our base case valuation assumes an estimated sales of $4.8 billion in 2021 (up 37.3% YoY). Our sales estimate of $4.8 billion in 2021 is similar to the company's sales in 2019. </div><div style="text-align: start;"></div><div style="text-align: start;">Our base case valuation also assumes an EV/Sales multiple of 8.3x in 2021, which is the same valuation multiple used for Booking Holdings, one of the comps. The $35 billion in market cap figure (top end of the IPO price range of $50 per share) would imply an EV/S multiple of 6.3x in 2021, if we use an estimated sales of $4.8 billion in 2021. The 6.3x EV/S multiple would be 24% below the valuation multiple of Booking Holdings but 22% higher than the average EV/S multiple of Airbnb's comps.</div>


Our base case valuation of Airbnb suggests an EV of $39.7 billion, an implied market cap of $45.0 billion, and an implied price per share of $64.3 per share, which would represent a 29% upside from the high end of the IPO price range of $44 to $50 per share. Given the attractive upside, we have a positive view of the Airbnb IPO. Our base case valuation assumes an estimated sales of $4.8 billion in 2021 (up 37.3% YoY). Our sales estimate of $4.8 billion in 2021 is similar to the company's sales in 2019. Our base case valuation also assumes an EV/Sales multiple of 8.3x in 2021, which is the same valuation multiple used for Booking Holdings, one of the comps. The $35 billion in market cap figure (top end of the IPO price range of $50 per share) would imply an EV/S multiple of 6.3x in 2021, if we use an estimated sales of $4.8 billion in 2021. The 6.3x EV/S multiple would be 24% below the valuation multiple of Booking Holdings but 22% higher than the average EV/S multiple of Airbnb's comps.

Airbnb

Airbnb IPO Valuation Analysis