Wondering if Airbnb is a bargain or overhyped in today’s market? You’re not alone. Whether you’re already a shareholder or simply curious, now is a great time to check if its price matches reality.
Despite gaining 22.9% over the past three years, Airbnb’s stock has slipped by 2.2% this week and is down 6.6% for the month. This hints at shifting investor sentiment or changing risk perceptions.
Much of the recent attention has centered around increased regulatory scrutiny in major cities, as well as changing travel patterns post-pandemic. Headlines about new short-term rental rules and international expansion efforts have added both optimism and uncertainty to Airbnb’s story.
Currently, Airbnb scores a 4 out of 6 on our undervaluation checks, so there is clearly more than one way to look at whether it is a good deal. Up next, we’ll break down the key valuation approaches and reveal a fresh way to make sense of where the stock could go from here.
The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future free cash flows and discounting them back to today’s dollars. This approach gives investors a sense of what the business is fundamentally worth.
For Airbnb, the most recent Free Cash Flow stands at $4.59 billion. According to analyst estimates and further projections, this figure is expected to grow consistently, reaching about $6.81 billion by 2029. Beyond 2029, Simply Wall St has extrapolated further growth, with 2035 projections climbing to roughly $9.56 billion. It is important to note these later forecasts are based more on modeling than analyst input.
Using this 2 Stage Free Cash Flow to Equity approach, the model calculates Airbnb’s estimated intrinsic value at $223.44 per share. This is 47.4% higher than the stock’s current price, which implies the market may be underestimating Airbnb’s long-term cash-generating power.
In summary, the DCF outlook sees Airbnb as significantly undervalued given its future cash flow potential.
The Price-to-Earnings (P/E) ratio is the most widely used valuation metric for profitable companies like Airbnb, as it directly connects a company’s share price to its earnings. Since Airbnb generates positive net income, using the P/E ratio allows investors to quickly compare its valuation to other firms both inside and outside its industry.
While a higher P/E can reflect high growth expectations and lower perceived risk, a lower P/E may signal slower growth or greater uncertainty. In Airbnb’s case, its current P/E stands at 27.1x, which is slightly below the average of its closest peers at 28.4x and noticeably higher than the broader hospitality industry average of 20.7x. This suggests investors expect Airbnb to continue outperforming traditional hospitality names, likely due to its growth profile and market position.
To provide a clearer perspective, Simply Wall St calculates a “Fair Ratio” for each company. This is the P/E multiple justified by factors such as the company’s growth outlook, profit margins, risk profile, industry, and market capitalization. For Airbnb, the Fair Ratio is 29.7x. Unlike simple peer or industry comparisons, this proprietary metric aims to capture the bigger picture by accounting for what makes Airbnb unique.
Since Airbnb’s P/E ratio of 27.1x is very close to its Fair Ratio of 29.7x, the stock appears to be valued about right based on its fundamentals and future prospects.
Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a simple, dynamic way to connect your view of a company’s story (how you think Airbnb’s business will evolve) to a set of financial forecasts (your assumptions for revenue, earnings, and margins), which roll up to a Fair Value for the stock.
This approach lets investors move beyond static ratios and models by letting them actively choose and track their own perspective, all within the Community page used by millions on Simply Wall St. Narratives turn the “why” behind your expectations into an actionable investment thesis. You can easily compare your Fair Value against Airbnb’s current price to decide whether it’s the right time to buy, hold, or sell. These valuations also refresh automatically as new company news, filings, or results roll in.
For example, some investors see Airbnb’s global expansion, AI-powered product improvements, and growing demand for experiences as reasons to value the company at $181, while others focus on regulatory risks and softer US performance, supporting a Fair Value closer to $98. Narratives let you test these assumptions and find the story that aligns with your own outlook, putting smarter, more personalized decision making at your fingertips.
NasdaqGS:ABNB Community Fair Values as at Nov 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
