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Airbnb Inc.
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=== Forecasts === ====What are the financial forecasts?==== =====Income statement===== {| class="wikitable" |+Income statement<ref>Source: Stockhub Limited</ref><ref group="Note" name="Note04" /> |- !Year !'''1''' !!'''2'''!!'''3'''!!'''4'''!!'''5''' !'''6''' !'''7''' !'''8''' !'''9''' !'''10''' !'''11''' !'''12''' !'''13''' !'''14''' !'''15''' !'''16''' !'''17''' !'''18''' !'''19''' !'''20''' !'''21''' !'''22''' !'''23''' !'''24''' !'''25''' !'''26''' !'''27''' !'''28''' !'''29''' !'''30''' !'''31''' !'''32''' !'''33''' !'''34''' !'''35''' !'''36''' !'''37''' !'''38''' !'''39''' !'''40''' !'''41''' !'''42''' |- |Year end date||31/12/2022||31/12/2023||31/12/2024||31/12/2025 ||31/12/2026 |31/12/2027 |31/12/2028 |31/12/2029 |31/12/2030 |31/12/2031 |31/12/2032 |31/12/2033 |31/12/2034 |31/12/2035 |31/12/2036 |31/12/2037 |31/12/2038 |31/12/2039 |31/12/2040 |31/12/2041 |31/12/2042 |31/12/2043 |31/12/2044 |31/12/2045 |31/12/2046 |31/12/2047 |31/12/2048 |31/12/2049 |31/12/2050 |31/12/2051 |31/12/2052 |31/12/2053 |31/12/2054 |31/12/2055 |31/12/2056 |31/12/2057 |31/12/2058 |31/12/2059 |31/12/2060 |31/12/2061 |31/12/2062 |31/12/2063 |- |Revenues ($'million)|| $78,935||$112,257||$154,816||$207,049||$268,527 |$337,721 |$411,894 |$487,157 |$558,739 |$621,448 |$670,282 |$701,078 |$711,102 |$699,445 |$667,163 |$617,116 |$553,551 |$481,510 |$406,171 |$332,253 |$263,564 |$202,749 |$151,247 |$109,414 |$76,757 |$52,217 |$34,448 |$22,038 |$13,673 |$8,226 |$4,799 |$2,715 |$1,490 |$793 |$409 |$205 |$99 |$47 |$21 |$9 |$4 |$2 |- |Gross profits ($'million)||$23,680||$33,677||$46,445||$62,115||$80,558 |$101,316 |$185,352 |$219,221 |$251,432 |$279,652 |$301,627 |$315,485 |$319,996 |$314,750 |$300,223 |$277,702 |$249,098 |$216,679 |$182,777 |$149,514 |$118,604 |$91,237 |$68,061 |$49,236 |$34,541 |$23,498 |$15,502 |$9,917 |$6,153 |$3,702 |$2,160 |$1,222 |$670 |$357 |$184 |$92 |$45 |$21 |$10 |$4 |$2 |$1 |- |Operating profits ($'million)||$11,840||$16,839||$23,222||$31,057||$40,279 |$50,658 |$123,568 |$146,147 |$167,622 |$186,434 |$201,085 |$210,323 |$213,331 |$209,834 |$200,149 |$185,135 |$166,065 |$144,453 |$121,851 |$99,676 |$79,069 |$60,825 |$45,374 |$32,824 |$23,027 |$15,665 |$10,335 |$6,612 |$4,102 |$2,468 |$1,440 |$815 |$447 |$238 |$123 |$61 |$30 |$14 |$6 |$3 |$1 |$1 |- |Net profits ($'million)||$9,354||$13,302||$18,346||$24,535|| $31,820 |$40,020 |$97,619 |$115,456 |$132,421 |$147,283 |$158,857 |$166,156 |$168,531 |$165,769 |$158,118 |$146,256 |$131,192 |$114,118 |$96,263 |$78,744 |$62,465 |$48,052 |$35,846 |$25,931 |$18,191 |$12,376 |$8,164 |$5,223 |$3,240 |$1,949 |$1,137 |$643 |$353 |$188 |$97 |$48 |$24 |$11 |$5 |$2 |$1 |$0 |} ==== What are the assumptions used to estimate the financial forecasts?==== {| class="wikitable" |+Key inputs !Description !Value !Commentary |- | colspan="3" | <div style="text-align: center;">'''Revenue'''</div> |- |What's the estimated current size of the total addressable market? |$2,975,000,000 |Here, the total addressable market (TAM) is defined as the global automotive market, and based on a number of assumptions<ref group="Note" name="Note01" />, it is estimated that the size of the market as of today (30th May 2022), in terms of revenue, is $2.975 billion. |- |What's the estimated terminal annual growth rate of the total addressable market? |3% |Research shows that the growth rate of the global automotive market (i.e. the total addressable market) is similar to the growth rate of global gross domestic product<ref>http://www.robertpicard.net/files/econgrowthandadvertising.pdf</ref>, which has averaged (medium) around 3% per year in the last 20 years (2001 to 2022)<ref>https://www.macrotrends.net/countries/WLD/world/gdp-growth-rate</ref>. |- |What's the estimated company peak market share? |10% |Stockhub estimates that the peak market share of Airbnb is around 10%, and, therefore, suggests using the share amount here. As of 31st December 2021, Airbnb's current share of the market is around 1.8%. |- |Which distribution function do you want to use to estimate company revenue? |Gaussian |Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped)<ref>http://escml.umd.edu/Papers/ObsCPMT.pdf</ref>, so Stockhub suggests using that function here. |- |What is the estimated company lifespan? |60 years | Airbnb employs around 110,000, making the company a large organisation (more than 10,000 employees), and research shows that the average lifespan of a large corporation is around 50 years.<ref>Stadler, Enduring Success, 3β5.</ref> |- |What's the estimated standard deviation of company revenue? | 6 years |Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Airbnb's current revenue amount (i.e. $54 billion) and Airbnb's estimated lifespan (i.e. 60 years) and Airbnb's estimated current stage of its lifecycle (i.e. growth stage), the Stockhub company suggests using 6 years (i.e. 68% of all sales happen within 6 years either side of the mean year), so that's what's used here. |- | colspan="3" |'''<div style="text-align: center;">Growth stages</div>''' |- |How many main stages of growth is the company expected to go through? | 4 stages |Research suggests that a company typically goes through four distinct stages of cash flow growth.<ref>Levie J, Lichtenstein BB (2010) A terminal assessment of stages theory: Introducing a dynamic approach to entrepreneurship. Entrepreneurship: Theory & Practice 34(2): 317β350. <nowiki>https://doi.org/10.1111/j.1540-6520.2010.00377.x</nowiki></ref> Research also shows that incorporating those stages into the discounted cash flow model improves the quality of the model and, ultimately, the quality of the value estimation.<ref>Stef Hinfelaar et al.:, 2019.</ref> In addition, research shows that a key way to determine the stage which a company is in is by examining the cash flow patterns of the company.<ref>Dickinson, 2010.</ref> A summary of the economic links to cash flow patterns can be found in the appendix of this report. Stockhub estimates that with Airbnb's operating cash flows positive (+), investing cash flows negative (-) and its financing cash flows positive (+), the company is in the second stage of growth (i.e. the 'growth' stage), and, therefore, it has a total of three main stages of growth. |- |What proportion of the company lifecycle is represented by growth stage 1? |30% |Research suggests 30%.<ref name=":6">http://escml.umd.edu/Papers/ObsCPMT.pdf</ref> |- |What proportion of the company lifecycle is represented by growth stage 2? |10% |Research suggests 10%.<ref name=":6" /> |- | What proportion of the company lifecycle is represented by growth stage 3? |20% | Research suggests 20%.<ref name=":6" /> |- |What proportion of the company lifecycle is represented by growth stage 4? |40% |Research suggests 40%.<ref name=":6" /> |- | colspan="3" |'''<div style="text-align: center;">Growth stage 2</div>''' |- |Cost of goods sold as a proportion of revenue (%) |70% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7">http://people.stern.nyu.edu/adamodar/pdfiles/papers/younggrowth.pdf</ref>, and the margin for its peers is 70%. |- |Operating expenses as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 15%. |- |Tax rate (%) |21% |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. Airbnb mainly operates in the United States, and the marginal tax rate there is 21%. |- |Depreciation and amortisation as a proportion of revenue (%) |5% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the margin for its peers is 5%. |- |Fixed capital as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 15%. |- |Working capital as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 2)<ref name=":7" />, and the amount for its peers is 15%. |- |Net borrowing ($000) |Zero |Stockhub suggests that for simplicity, the net borrowing figure is zero. |- |Interest amount ($000) |Zero |Stockhub suggests that for simplicity, the interest amount figure is zero. |- | colspan="3" |'''<div style="text-align: center;">Growth stage 3</div>''' |- |Cost of goods sold as a proportion of revenue (%) |55% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 55%. |- |Operating expenses as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the margin for its peers is 15%. |- |Tax rate (%) |21% |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. Airbnb mainly operates in the United States, and the marginal tax rate there is 21%. |- |Depreciation and amortisation as a proportion of revenue (%) |5% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 5%. |- |Fixed capital as a proportion of revenue (%) |3% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 3)<ref name=":7" />, and the amount for its peers is 3%. |- |Working capital as a proportion of revenue (%) |10% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. |- |Net borrowing ($000) |Zero |Stockhub suggests that for simplicity, the net borrowing figure is zero. |- |Interest amount ($000) |Zero |Stockhub suggests that for simplicity, the interest amount figure is zero. |- | colspan="3" |'''<div style="text-align: center;">Growth stage 4</div>''' |- |Cost of goods sold as a proportion of revenue (%) |55% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 55%. |- |Operating expenses as a proportion of revenue (%) |15% |Research suggests that it's best to use a similar margin rate as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the margin for its peers is 15%. |- |Tax rate (%) |21% |Research suggests that it's best to use the marginal tax rate of the country in which the company mainly operates. Airbnb mainly operates in the United States, and the marginal tax rate there is 21%. |- |Depreciation and amortisation as a proportion of revenue (%) |5% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 5%. |- |Fixed capital as a proportion of revenue (%) | 3% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 3%. |- |Working capital as a proportion of revenue (%) | 10% |Research suggests that it's best to use a similar amount as the one used by peers that are in the same growth stage (i.e. growth stage 4)<ref name=":7" />, and the amount for its peers is 10%. |- |Net borrowing ($000) |Zero |Stockhub suggests that for simplicity, the net borrowing figure is zero. |- |Interest amount ($000) |Zero |Stockhub suggests that for simplicity, the interest amount figure is zero. |}
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