Airbnb, Inc.ABNBNASDAQ

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Buy

Fair Value: $161.94 per share(market-calibrated)

+21.5%

Upside to Fair Value

Current

$133.26

Pure Model

$162.97

Fair Value

$161.94

Bull Case

$210.60

Bear Case

$123.31

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

2.33%

Calibrated Growth

2.83%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $162.97.

What's Driving This Ratingfor ABNB

✓

CapEx already efficient

CapEx at 0.04% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 35.97% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

↑

Strong near-term revenue growth

Analyst consensus projects 11.86% revenue growth in Year 1, fading to 8.59% by Year 5 and 3.00% by Year 10. Revenue reaches $25.1B by Year 10 (vs $12.2B today).

✓

Model and market roughly agree

Market-implied terminal growth of 2.33% is close to the model's 3.00% (only 67bps apart). The DCF assumptions are well-aligned with how the market is pricing this stock.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 80.11% indicates efficient cash generation. FCF reaches $7.4B by Year 10 (29.30% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.14

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.63%

Cost of Debt

Pre-tax Cost of Debt5.27%

Tax Rate19.96%

After-tax Cost of Debt4.22%

Equity Weight (E/V)97.53%

Debt Weight (D/V)2.47%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (97.53% × 9.63%) + (2.47% × 4.22%)

= 9.49%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$13.7B	$16.6B	$19.5B	$22.3B	$25.1B
EBIT	$4.9B	$6.0B	$7.0B	$8.0B	$9.0B
Tax	$983M	$1.2B	$1.4B	$1.6B	$1.8B
NOPAT	$3.9B	$4.8B	$5.6B	$6.4B	$7.2B
+ Depreciation	$84M	$101M	$119M	$136M	$153M
- Capex	$6M	$7M	$8M	$9M	$10M
- Δ NWC	$29M	$29M	$30M	$26M	$14M
Free Cash Flow	$4.0B	$4.8B	$5.7B	$6.5B	$7.4B
Discount Factor	0.913	0.762	0.635	0.530	0.404
Present Value	$3.6B	$3.7B	$3.6B	$3.5B	$3.0B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$7.4B

Terminal Growth Rate3.00%

WACC9.49%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$116.8B

PV of Terminal Value$47.2B

Exit Multiple Method

Year 10 EBITDA$9.2B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$183.8B

PV of Terminal Value$74.2B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$34.7B

PV of Terminal Value$47.2B

Enterprise Value$81.9B

(-) Net Debt-$4.5B

Equity Value$86.4B

Shares Outstanding613M

Price per Share$140.90

Exit Multiple Method

PV of Projected FCFs$34.7B

PV of Terminal Value$74.2B

Enterprise Value$108.9B

(-) Net Debt-$4.5B

Equity Value$113.4B

Shares Outstanding613M

Price per Share$185.04

Pure Model Fair Value

$162.97

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
7.49%	$196.84	$202.55	$209.54	$218.28	$229.52
8.49%	$174.93	$178.64	$183.02	$188.28	$194.71
9.49%	$157.51	$160.05	$162.97	$166.38	$170.42
10.49%	$143.17	$144.97	$147.02	$149.35	$152.05
11.49%	$131.08	$132.40	$133.88	$135.54	$137.42

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$123.31

-7.5% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 1.42

Base Case

$162.97

22.3% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 1.14

Bull Case

$210.60

58.0% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 0.97

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Consumer Cyclical Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth11.86%

Year 3 Revenue Growth9.97%

Year 5 Revenue Growth8.59%

Year 7 Revenue Growth6.35%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin35.97%

Tax Rate19.96%

Historical Capex / Rev0.04%

NWC / Revenue1.96%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Cyclical sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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