Airbnb Just Popped After a Blowout Quarter. Is the Stock Still a Buy?

Airbnb's stock surged 12% on Friday after the company announced a strong third-quarter performance that surpassed forecasts. The stock is now near its 52-week high and has climbed 40% so far in 2026. While investors have long viewed Airbnb as a solid business, its growth hasn't been particularly impressive. However, the recent results could alter that view.

Airbnb's revenue expanded by 19% year-over-year, or 16% excluding currency effects, outpacing analysts' expectations. Earnings per share reached $3.16, exceeding the $2.85 estimate. Demand was robust, with 155 million nights and seats booked, a 16% increase from a year ago, and gross booking value growing by 21% to $27.7 billion.

Beyond revenue, Airbnb remains a cash generator. It has amassed $4.9 billion in free cash flow over the past 12 months, and adjusted EBITDA climbed by 22%. The company is also venturing into new growth areas, such as meal delivery and car rentals, which currently account for a significant yet still single-digit share of booked nights.

Looking ahead, Airbnb anticipates fourth-quarter revenue between $3.22 billion and $3.28 billion, a 17% increase at the midpoint. The company holds over $12 billion in cash and generated $5 billion in free cash flow annually. The board has authorized a new $12 billion share buyback program, adding to the remaining $2.7 billion from the existing authorization.

Notably, this single buyback represents over 10% of Airbnb's market value. Despite concerns that AI could disrupt online travel stocks like Airbnb, management remains optimistic. They believe AI will benefit their business, as they resolved 40% of customer issues without human intervention, reducing support costs by 17%.