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Airbnb (NYSE:ABNB) stock is slowly turning around. I believe there is good reason to believe that ABNB stock could rise significantly from here. That is despite its nearly 20% climb so far this year to $167.07, as of April 22, and also in spite of the recent tech downturn.

Source: AlesiaKan /

Moreover, the IPO at $68.00 on Dec. 10 raised $3.5 billion and the stock closed at $144.71 on its first day of trading. So it’s up only $22.36 since then, or just over 15%.

In my last article on Airbnb, I compared ABNB stock to Square (NYSE:SQ). Since then both companies have released their 2020 earnings. At the time I wrote that ABNB was worth $283 per share. It looks like that is still a good price target. In fact, I now believe ABNB stock is worth $299, or 79% above current prices.

Airbnb’s Value Compared With Square

Both companies have similar business models. They don’t have physical inventories, but they take a commission on virtual inventory. Square’s inventory is its gross payment volume (GPV). Airbnb’s bookings are what it calls gross booking volume (GBV).

The business model profits from the “take rate,” AKA fees. Square’s transaction-based revenue or take rate on the GPV from its seller side and cash app (from page 24 of its shareholder letter) was $3.3 billion on GPV on $112.3 billion. This makes its take rate was about 2.93% for the year.

By comparison, Airbnb made $3.4 billion in revenue on $23.4 billion in GBV during 2020. That’s a take rate of 14.5%, meaning 5 times greater than Square’s business model.

These take rates held up for the latest quarter as well. In Q4, Square had a 2.9% take rate on its GPV of  ($929 million of revenue on GPV of $32 billion. But Airbnb had a take rate of 14.55% ($859 million revenue on GBV of $5.9 billion). This means Airbnb’s business is stable and truly worth at least 5 times the valuation of Square, at least on a price-to-sales basis.

What ABNB Stock Is Worth

Square trades on a price-to-sales ratio of 7.88 times for 2021, according to Seeking Alpha’s survey of analysts.

Yet Airbnb’s price-to-sales multiple is just 22 times. It should have a multiple that is 5 times Square’s, or 39.4 times revenue. This year analysts expect $4.76 billion in revenue in 2021. So Airbnb should have a market value of $187.5 billion (i.e. 39.4 times $4.76 billion).

Given that ABNB stock has a market value now of $104.6 billion, this implies its price should be 79.3% higher. The puts its target price at $299 per share or 79.3% above today. This is also higher than my previous target of $283, based on Airbnb’s excellent Q4 and full-year 2020 figures.

What to Do With Airbnb Stock

Most analysts have a much lower price target than today’s price. However both TipRanks and Yahoo! Finance have higher price targets for the stock ($188.07 and $200.35, respectively).

This highlights the fact Airbnb’s business model deserves a much higher rating than Square.

Over time the market will realize this. It may take two years or so for ABNB stock to rise at least 79.3% higher to $304 per share. This ROI, over two years, implies a compound average annual growth rate (known as a CAGR) of 33.9% each year.

Even if it takes 3 years for this to work out (which I doubt) the CAGR will be 21.5% annually. Both of these annual return rates would be excellent investment returns for most investors.

But I suspect that ABNB will move much closer to this $304 per share price target by the end of this year. This also implies the present tech downturn takes its course and ABNB stock turns around higher towards the $304 price target.

Even if it doesn’t happen right away, investors can be confident that Airbnb’s business model is worth much more than its present price.

On the date of publication, Mark R. Hake held a long position in Square (SQ) stock.

Mark Hake writes about personal finance on and runs the Total Yield Value Guide which you can review here.