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- RBNB will enter the public market this week, valued at .4 26.4 billion and .8 29.8 billion. It’s a reasonably priced IPO, according to David Trainer, founder and CEO of New Constructions.
- “Trainer said in a recent note that unlike other recent IPOs and some stocks where valuations are sky-high, RBNB has a sensible path to profitability.
- The trainer added that investors should be wary of risks to the company, including exposure to Airbnb’s state and local regulations that would restrict the home-sharing business.
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The RBNB is set to go public this week, with stock trading set to begin on Thursday. The home-sharing company has set a target price range of $ 44–55, which will range from 26.4 billion to 29 29.8 billion. David Trainer, founder and CEO of New Constructions, says the IPO is worth it.
“Unlike other recent IPOs and some stocks, where valuations are sky-high, RBNB has a sensible path to profitability,” Trainer wrote in a recent note.
The equity analyst said that if RBNB maintains its revenue growth as seen before the epidemic, while reducing its marketing costs, it will be valued at around Rs 28 billion, which is the middle of its IPO price range.
If the firm doubles in cost efficiency, and sacrifices revenue growth, and achieves profitability compared to booking holdings, it is one of the most profitable travel companies, valued at RBNB.7. could be billions of dollars.
Trainer revealed that RBNB has the largest platform for room listing of many of its competitors, and that it benefits from its scale. The more listed on the platform, the more customers will turn to RBNB, which in turn will reach the largest audience to host more property owners on the platform.
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“With each new listing, attracting users, and versus, becomes theoretically cheaper,” Trainer said.
He added that the company could further benefit customers who prefer to stay in hotels on short-term rent due to concerns over the spread of coronavirus.
RBNB is sensitive to local, state and country regulations on the business of providing homes for short-term investments. RBNB noted in its IPO filing that the upcoming rules in New York (2% of its revenue in 2019) would hurt revenue if hosts started leaving RBNB because they did not want to comply with the new rules, the analyst said.
The trainer also said that investors should be wary of RBNB’s finances as neither the management nor the auditors have evaluated the firm’s internal control over the financial reporting.
In the end, the trainer suspects that insiders may try to “dump shares” on retail investors. “Early investors and employees are putting pressure on RBNB’s CEO to go public this year, as they decide to lose their stock options next year,” he pointed to a report in the Wall Street Journal.
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