AirBnB stock (NASDAQ:ABNB) and Atlassian stock (NASDAQ:TEAM) have fallen dramatically from their 52-week highs. Both AirBnB and Atlassian stocks are down over 50% from their 52-week highs.
AirBnB sales increased by 57% year on year, whereas Atlassian revenue increased by 35% year on year. Both companies are still highly valued, with AirBnB and Atlassian stocks now trading at a price-to-sales ratio of 10.
Both of these firms are growing rapidly at a time when growth stocks have dramatically declined; nonetheless, given the company’s future economics, there may be value in the stocks.
Are These Growth Stocks Worth Buying?
Travel is what drives AirBnB stocks.
AirBnB stock (NASDAQ:ABNB) continues to expand rapidly, owing to a rising number of tourists seeking alternatives to hotels. The average occupancy rate has gradually increased to 52%, with an average price per room of roughly $140.
During the most recent results call, the CEO stated:
“In terms of growth, we surpassed 103 million nights and experiences booked, which was our highest quarterly total ever. Revenue was $2.1 billion, up 58% from last year or 64% excluding foreign currency. Gross booking value was $17 billion, up 27% from last year or 34% excluding foreign exchange.”
The trailing price-to-earnings ratio is at 50, and the net profit margin for the most recent quarter is 16%. As AirBnB cuts expenses and increases usage, the net profit margin may easily grow to 20% in the next quarters. The two together could increase the P/E ratio above 30 times earnings.
The costs of AirBnB are not much different from those of hotels, and doubts remain regarding whether consumers would pick Airbnb over hotels and if the trend of renting will continue. But, for the time being, AirBnB is doing well, and users are staying with the site.
Atlassian Stocks Continue to Perform Well.
Atlassian stock (NASDAQ:TEAM) is another firm that is expanding at a rapid rate. Jira, the company’s software, has become indispensable to developers, and it has one of the best gross profit margins in the general technology business, at 83%. Even though firms are cutting down on IT personnel, the CEO stated:
“We’ve seen throughout the years that developers are the final positions that firms cut,” they wrote. “We expect this will continue to be true, particularly given the large number of enterprises experiencing a digital transformation.” Second, although our products outperform in terms of value, Atlassian is a pretty tiny line item in total IT spending and is unlikely to be where clients go to save money.”
Even though Atlassian’s SaaS and applications business is becoming more important to many developers’ work, it only has approximately 7% of the market, indicating that it has a lot of space to expand.
Both of these companies stocks have the potential to be long-term winners for investors searching for firms with a significant competitive edge and lots of opportunities to develop.
Featured Image – Megapixl © Salarko