After being pent up at home for months on end, consumers are looking to get out and travel more. That’s a trend showing signs of growth, a welcome indicator as the economy contends with persistent inflation and supply chain issues for physical goods.
With that trend moving higher, a number of companies are likely to benefit. Probably not airlines, given higher energy prices. But investors who look elsewhere can be rewarded.
One big potential winner is Airbnb (ABNB). The rental platform doesn’t own any real estate, but earns money on each transaction booked through its platform. And that’s a trend that plays not just to vacation renters, but to longer-term renters using the service as well.
That’s likely why shares are being upgraded, as the company’s outlook could likely improve from here. In their first-year trading, shares have slightly underperformed the S&P 500 index.
Action to take: With revenue up nearly 300 percent in the past year on a rebound in travel trends, the company can likely move higher from here, even as the company remains far from profitability right now.
Traders may like a call option trade, as the stock has been trending up since July. The January $200 calls, last going for about $5.50, are somewhat aggressive in terms of strike price for the next few months, but for a year-end market rally, the returns in the next few months could close in on a double or better for the option.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.