- CNBC's Jim Cramer said Tuesday he believes Airbnb will be a successful long-term investment, making the stock's recent weakness a potential buying opportunity for fellow company bulls.
- "I think this is one of those infants that's been thrown out with the growth-stock bathwater," the "Mad Money" host said.
- He recommended interested investors buy the stock at set intervals, with bigger purchases the further shares fall.
"I think this is one of those infants that's been thrown out with the growth-stock bathwater," the "Mad Money" host said, referring to Airbnb's steep decline since mid-November as many high-growth technology stocks fell out of favor on Wall Street.
"While Airbnb gets grouped with the recent IPOs because it came public 13 months ago ... this thing is actually profitable. That makes a huge difference in a market that suddenly cares about earnings at all costs," Cramer said.
Still, Airbnb shares are down about 27% from their highs, Cramer acknowledged.
"Maybe it goes down 30%. Hey, maybe it goes down 40%. Stage your buys, get bigger as it goes down like we do in the [CNBC Investing Club]," he said. "I think this is a fabulous long-term winner that can beat Wall Street's earnings estimates, and as they deliver those better-than-expected numbers, the stock should be able to make a major comeback."
The coronavirus pandemic has challenged many companies in the travel industry and did once again with the spread of the Covid omicron variant. Cramer said he expects Covid cases in the U.S. to decline soon, providing a boon for Airbnb and the entire travel complex.
"But even if I'm wrong and we keep getting hit with worse variants, I still feel pretty good about Airbnb's prospects," Cramer said, contending that some people view Airbnb as a safer way to travel during Covid since they can stay in a rented house that's completely theirs. "That's why I'm not particularly worried about omicron crushing Airbnb's numbers right now."
Plus, Cramer said he thinks that many people who turned to Airbnb for the first time during the Covid crisis will keep using the home-rental platform for future trips. The rise of remote work is another tailwind for the company, he said.
"Look, you don't know when a growth stock will stop going down, but if it's profitable like Airbnb then it gets cheaper as it goes lower, which means you can justify buying it on the way down," Cramer said.
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