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A fairly simple DCF[1] based on public numbers. First the basic numbers. From public data[2] in 2015 AirBnB did at least $360M in revenue, expecting to hit $90
by spitfire 10y ago
A fairly simple DCF[1] based on public numbers. First the basic numbers.
From public data[2] in 2015 AirBnB did at least $360M in revenue, expecting to hit $900M by the end of that year. They never disclosed if they did hit that number, but lets assume they did.
So, 2015 Revenue is $900M.We'll assume a 8% yearly growth rate over the next 10 years. With a terminal growth rate of 4% after that.
I think we can accept 6% as a discount rate - The rate we'd otherwise get
just shoving our money in a stock market index.
and based on those numbers, we get a valuation of $19774.14 Billion.
to get a $30B valuation in this analysis they'd have to have 14% YoY growth
for 10 years. Which I think is unrealistic.
[1] http://www.gurufocus.com/fair_value_dcf.php http://www.gurufocus.com/fair_value_dcf.php
[2] https://www.quora.com/How-much-revenue-is-Airbnb-making https://www.quora.com/How-much-revenue-is-Airbnb-making
- dsacco 10y agoThank you. This is the sort of reasoning I was looking for. Now, I'd counter your argument here by stating that it appears Airbnb had over 100% growth in 2015, and Expedia and HomeAway had 24% and 20% growth respectively.[1] Given that, is it unrealistic to assume the market can support 14% YoY growth (or higher) for the next ten years? [1]: https://www.cbinsights.com/blog/airbnb-hospitality-industry-valuation-breakdown/ https://www.cbinsights.com/blog/airbnb-hospitality-industry-...
- spitfire 10y agoThat is a question worth answering. But now we have reasonable ground to make statements one way or the other. I personally think yes, they'll saturate their market fairly quickly from here on out. Also, I expect they'll start attracting competitors soon.
- dsacco 10y agoThank you. This is the sort of reasoning I was looking for. Now, I'd counter your argument here by stating that it appears Airbnb had over 100% growth in 2015, and Expedia and HomeAway had 24% and 20% growth respectively.[1] Given that, is it unrealistic to assume the market can support 14% YoY growth (or higher) for the next ten years? [1]: https://www.cbinsights.com/blog/airbnb-hospitality-industry-valuation-breakdown/ https://www.cbinsights.com/blog/airbnb-hospitality-industry-...