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There’s a wave of optimism in the travel industry, fueled by pent-up demand. With a resurgence of interest in travel in the aftermath of the pandemic, hotels are making a comeback. In such a scenario, this article will compare the basics of Airbnb, Inc. (ABNB) and Atul Lifestyle Holdings Limited (atat) Determine which one will give you better returns.
The days of pandemic-related caution surrounding vacation travel are largely over. Health and safety concerns have largely subsided, and Americans are taking more and more vacation trips.
According to Deloitte, approximately 48% of Americans plan to travel this holiday season. Across all age and income groups, intentions to travel from Thanksgiving to mid-January have increased, with the average vacation budget being $2,725.
Additionally, there has been a notable shift in accommodation preferences, with more than half (56%) of holidaymakers planning to stay in a hotel, a significant increase from the 35% recorded in 2022.
Meanwhile, the hotel industry is leveraging artificial intelligence (AI) technology to improve user experience, streamline operations, increase efficiency, and tailor services to individual preferences. AI in the hospitality industry is projected to reach $8.12 billion by 2033, indicating steady growth. CAGR 60% From 2023 to 2033.
Amid this promising industry landscape, the global travel and tourism market revenue is expected to reach $856.1 billion by 2023, with a CAGR of 4.4% from 2023 to 2028. Moreover, the hotel market is the largest segment in the world. The travel and tourism industry is projected to generate $411 billion in revenue in 2023. A whopping 1.4 billion users By 2028.
Given the promising outlook for the industry, both ABNB and ATAT should benefit. In terms of price performance, ABNB stock has increased by 7.3% over the past six months, closing its last trade at $137. Meanwhile, ATAT’s stock price rose 3.4% during the period to close at $17.12.
However, to find out which Travel – Hotels/Resorts Stocks are a better choice. Let’s dig deeper into its fundamentals.
Recent trends
ABNB on December 18 introduced restrictions on certain New Year’s Eve bookings as communities around the world prepare for the arrival of 2024. By leveraging AI-powered technology to implement these measures, ABNB aims to minimize the risk of unauthorized disruptive parties in local neighborhoods.
Commenting on this, Nava Banerjee, Head of Trust and Safety at ABNB, said: We are optimistic that these measures will help us have a positive impact on the communities we serve. ”
Conversely, on September 28, ATAT paid its shareholders a quarterly dividend of $0.05 per share. The company’s annual dividend yield is 0.88% when converted to the prevailing price, and the average dividend yield over four years is 0.23%.
Recent financial results
ABNB’s total revenue for the fiscal third quarter (ended September 30, 2023) amounted to $3.39 billion. Meanwhile, net income and net income per share were $4.37 billion and $6.63, respectively, an increase of 260.3% and 270.4% year-on-year.
However, during the same period, the company’s total costs and expenses increased 13.1% year over year to $1.9 billion. Additionally, total current liabilities were $9.82 billion, an increase of 23.1% compared to $7.98 billion as of December 31, 2022.
ATAT’s net revenue for the third quarter of the fiscal year ended September 30, 2023 increased 93.1% year-over-year to $177.37 million, and operating income increased 129.9% year-over-year to $46.78 million. .
Furthermore, the company’s net income and net income per common share were $35.92 million and $0.09, respectively, an increase of 135.8% and 110% from the same period last year.
Past and expected financial performance
ABNB’s revenue has grown at a CAGR of 38.4% over the past three years. Street expects ABNB’s fiscal fourth quarter (ending December 2023) revenue and EPS to increase 13.4% and 21.8% year over year to $2.16 billion and $0.58, respectively.
Conversely, ATAT’s revenue has improved at a CAGR of 13% over the past three years. Analysts expect ATAT’s sales and EPS for the fourth quarter (ending December 2023) to be $117.4 million, or $0.21, up 88.1% and 134.8% year over year.
Profitability
ATAT’s trailing 12-month asset turnover ratio is 0.63x, which is higher than ABNB’s 0.51x. Similarly, ATAT’s trailing 12-month Capex/Sales of 1.18% is higher than ABNB’s 0.40%.
Therefore, ATAT is more profitable.
evaluation
In terms of future EV/sales ratio, ABNB’s 8.00x is 122.8% higher than ATAT’s 3.59x. Similarly, ABNB’s forward price-sales ratio of 8.88x is 133.1% higher than ATAT’s 3.81x.Additionally, ABNB’s forward EV/EBITDA The multiple of 22.19 is 73.5% higher than ATAT’s 12.79.
Therefore, ATAT is more affordable.
power rating
ABNB has an overall rating of C, which equates to Neutral based on our independent rating. power rating system. Conversely, ATAT’s overall rating is B, which equates to a “buy”. POWR ratings are calculated by considering 118 different factors, with each factor weighted to the best degree.
Our proprietary rating system also evaluates each stock based on eight different categories. ABNB has a Growth grade of C, which is justified by its mixed results in the most recently reported quarter. ATAT’s ‘Growth’ A grade is consistent with its strong third quarter performance.
Of the 20 stocks, Travel – Hotels/Resorts In the industry, ABNB is ranked 10th and ATAT is ranked 2nd.
In addition to the above, we also evaluated both stocks on Value, Momentum, Stability, Sentiment, and Quality. click here View ABNB ratings.Get all ATAT ratings here.
winner
As 2023 comes to a close, the outlook for the travel industry is brightening thanks to vacation optimism, technological advancements, and waning pandemic-related caution. Both ABNB and ATAT should benefit from such a scenario, but ATAT’s improved financials, higher profitability, and lower valuation could make it a better buy compared to ABNB. .
Our research shows that investing in stocks with a Strong Buy overall rating increases your odds of success.Travel – See all top-rated stocks in the Hotel/Resort industry here.
What’s next?
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ABNB stock was trading at $135.56 per share on Friday afternoon, down $1.44 (-1.05%). Year-to-date, ABNB has gained 58.55%, compared to the benchmark S&P 500 index’s gain of 25.72% during the same period.
About the author: Anushka Mukherjee
Anushka’s ultimate goal is to provide investors with critical knowledge that will enable them to make informed investment choices and achieve long-term sustainable financial prosperity. . more…
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