The Airbnb cows can be thrived despite its challenges

• Airbnb faces organizational obstacles that the administration should try to overcome.

• The company benefits from the large demographic winds.

• Airbnb is a cash flow machine and a great arrow for possession.

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the Travel industry It is a profitable but difficult world. This is especially true when it comes to leasing in the short term. Mobility in local regulations and international expansion with satisfying thousands of hosts and even more guests are some of the arduous challenges they face Airbnb (Nasdaq: abnb)One of the leaders in space.

Its administration increases its cooperation with the regions and enhances what is seen as logical regulations while maintaining its ability to work freely. However, in some major markets, such as Hawaii, New York and Paris, state governments and state governments have imposed strict restrictions on how to run short -term rents. Many home owners’ societies also have non -friendly rules for owners who want to convert their property into short -term rents. However, the news is not bad for Airbnb.

The market where you work is enormous and continues to grow. There are also demographic winds, where young generations tend to be attracted towards Airbnbs more than their parents. Short -term rents (vacation rental on the graph below) is a large part of the market that is expected to exceed $ 1.1 trillion by 2029.

What does this mean for Airbnb? Criticism, and many of them.

Airbnb is just a software platform in its essence. There is also a customer service element. However, companies in this industry lack expensive factories, equipment and other major infrastructure that many other industries. Real estate and equipment purchases are often referred to as CAPEX (short to Capital expenses) And reduce the amount of money that the company can keep. Free cash flow is one of the reasons why software companies, such as Crowdstrike (Nasdaq: CRWD) and Baldir (Nasdaq: PLTR)Often trade in higher assessments of companies in other industries.

For example, Intel (Nasdaq: intc)A designer and clashes on semiconductors spent $ 5.2 billion on Capex in its last quarter, with 40 % of their revenues. Airbnb spent only $ 14 million in the last quarter of Capex, less than 1 % of its revenues. Meanwhile, the free cash flow – the remaining amount increased after operating the expenses and capital expenditures – increased.

4.4 billion dollars, the above is 40 % of revenues during the same period. 40 % free cash flow margin is an incredible and well -handed personality to shareholders.