Critical Contrast: Airbnb (NASDAQ:ABNB) and Royal Caribbean Cruises (NYSE:RCL)

Airbnb (NASDAQ:ABNB) and Royal Caribbean Cruises (NYSE:RCL) are both large-cap consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Airbnb and Royal Caribbean Cruises, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Airbnb	1	13	22	2	2.66
Royal Caribbean Cruises	1	5	14	1	2.71

Airbnb currently has a consensus target price of $157.76, suggesting a potential upside of 17.02%. Royal Caribbean Cruises has a consensus target price of $344.79, suggesting a potential upside of 24.71%. Given Royal Caribbean Cruises’ stronger consensus rating and higher possible upside, analysts clearly believe Royal Caribbean Cruises is more favorable than Airbnb.

Insider & Institutional Ownership

80.8% of Airbnb shares are owned by institutional investors. Comparatively, 87.5% of Royal Caribbean Cruises shares are owned by institutional investors. 27.2% of Airbnb shares are owned by insiders. Comparatively, 6.4% of Royal Caribbean Cruises shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Airbnb has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Royal Caribbean Cruises has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500.

Profitability

This table compares Airbnb and Royal Caribbean Cruises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Airbnb	19.90%	31.24%	10.16%
Royal Caribbean Cruises	24.36%	45.25%	11.13%

Earnings and Valuation

This table compares Airbnb and Royal Caribbean Cruises”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Airbnb	$12.65 billion	6.42	$2.51 billion	$4.06	33.21
Royal Caribbean Cruises	$18.39 billion	4.03	$4.27 billion	$16.39	16.87

Royal Caribbean Cruises has higher revenue and earnings than Airbnb. Royal Caribbean Cruises is trading at a lower price-to-earnings ratio than Airbnb, indicating that it is currently the more affordable of the two stocks.

Summary

Royal Caribbean Cruises beats Airbnb on 10 of the 15 factors compared between the two stocks.

About Airbnb

Airbnb, Inc., together with its subsidiaries, operates a platform that enables hosts to offer stays and experiences to guests worldwide. The company’s marketplace connects hosts and guests online or through mobile devices to book spaces and experiences. It primarily offers private rooms, primary homes, and vacation homes. The company was formerly known as AirBed & Breakfast, Inc. and changed its name to Airbnb, Inc. in November 2010. Airbnb, Inc. was founded in 2007 and is headquartered in San Francisco, California.

About Royal Caribbean Cruises

Royal Caribbean Cruises Ltd. operates as a cruise company worldwide. The company operates cruises under the Royal Caribbean International, Celebrity Cruises, and Silversea Cruises brands, which comprise a range of itineraries. As of February 21, 2024, it operated 65 ships. Royal Caribbean Cruises Ltd. was founded in 1968 and is headquartered in Miami, Florida.