Airbnb Warns of Slowing Demand

Earn While You Learn! ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Airbnb Warns of Slowing Demand The bad news keeps on coming. Airbnb plunged 14% in extended trading after warning that it saw signs of slowing demand from U.S. consumers. While the company beat revenue estimates, its EPS came in at 86 cents versus 92 cents expected. The company said it expected year-over-year growth for its “Nights and Experiences” category to moderate in the third quarter. Why? Airbnb was “seeing shorter booking lead times globally and some signs of slowing demand from U.S. guests.” Super Micro Computer also plummeted 13% last night after whiffing its EPS report. The server company reported a $6.25 adjusted EPS while analysts expected $8.07. Despite experiencing “record demand of new AI infrastructures,” Super Micro’s gross margin fell to 11.2% from 15.5% in the third quarter. Lastly, it issued EPS guidance at the midpoint of $7.48 versus the consensus estimates of $7.58. Super Micro Computer (Photo: Bloomberg / Contributor / Getty Images) These disappointing results came after yesterday’s solid rebound in the market. The Nasdaq 100 jumped as much as 2.1% before cooling to a 1.03% gain. Many analysts on Wall Street were still convinced that a recession wasn’t a sure thing. They viewed the pullback as a brief breather after a nearly non-stop rally. - “We would characterize the recent market pullback as a textbook correction, after months of low volatility so far in 2024,” said Carol Schleif at BMO Family Office. - “The lack of volatility before the past few weeks is unusual, and our current correction is actually quite normal, especially during August, which historically is a volatile time for markets given lighter trading volumes and the summer doldrums.” David Donabedian at CIBC Private Wealth US believed that Wall Street may be overreacting to the recent slowdown in the economy. He viewed it as a mere slowdown — rather than a sign of a looming recession. - “The Fed worries about systemic risk in financial markets, not disappointed investors,” said David Donabedian at CIBC Private Wealth US. “Thus, the Fed is unlikely to change its course of action due to a stock market correction. Are we headed for a near term recession, or are markets overreacting? We believe slower growth is unfolding, not a recession.” Nonetheless, traders are better off not trying to catch the “falling knives” by trying to pinpoint the bottom of the market. A savvy trader would wait until there are clear signals that stocks are poised to rally again. Why This Advertising Stock Could Be a Slam Dunk Today’s Stock Pick: Outfront Media Inc. (OUT) One of Mark Twain’s most famous quotes was, “The reports of my death are greatly exaggerated.” And remember the hype about the apocalypse of physical retail stores? That was “greatly exaggerated,” as well. The same thing is happening with outdoor and metro billboards. The boom of digital ads on Google and Facebook led some experts to declare the death of print advertising. Not so true. It is actually growing as Big Tech is spending more dollars on billboards. In fact, Apple is one of the biggest spenders, allocating nearly 10% of its advertising budget to out-of-home. The advantage of billboards is a captive audience. Take metros as an example. People are stuck inside a metro car, and they would look at a billboard far longer than any ads they see on smartphones. And yet, their cost of advertising is lower than digital ads. Outdoor remains by far one of the most cost-effective forms of advertising with Magna estimating that outdoor's cost per thousand impressions is lower than any other form of media, TV, radio, print, and digital. E-commerce startups flocked to the subway advertising, with Casper calling them “conversation starters.” SoFi also ran an ad campaign on the New York subway for its SoFi at Work product, and the company saw how effective it is: - “The subway is a really cost-efficient medium from a reach and frequency standpoint,” said Margi Brown, SoFi’s VP of marketing and media. “It has allowed us to amplify our message to a commuter audience with a very specific message — keeping it simple and easily consumable.” And of course, there was a famous Silicon Valley billboard story. Brex provides business credit cards and cash management solutions exclusively for technology companies. The company started with a conventional digital marketing strategy by focusing heavily on Google and Facebook. The results were disappointing, so they began advertising on billboards all over the Bay Area. That was unconventional at that time because tech companies used to view billboards as obsolete. But Brex CEO estimates out-of-home advertising outperformed Google and Facebook by a whopping 10x! Outfront Media is the leader in out-of-home advertising. Its stock offers you an attractive valuation for a rock-solid return. Now, it has two main areas of business – billboard advertising (like the ones you see on a highway) and transit system advertising (inside metro cars). It has a huge presence in the New York City subway, along with D.C. and Los Angeles transit systems. (Source: Outfront Media) The stock is classified as a real estate investment trust. Meaning? At least 90% of its earnings will be paid out in dividends. It doesn’t own the subway, although. It would bid on ad spaces and lease them out to advertising clients. For an outdoor billboard, Outfront owns the structure of its billboard but rents from a landowner who owns the land that its billboard stands on. (Source: Outfront Media) Outfront Media had tough quarters during the pandemic, but the business recovered to its pre-pandemic level. Now, it struggled in the last few quarters with almost flat growth. However, growth was starting to accelerate slightly in the last two quarters which might be a good sign for its future. (Source: Outfront Media) Digital transformation: Like any industry, outdoor advertising is going through a digital transformation. Papers are out, digital is in. Billboards are turning digital, and they bring in four to six times the amount of revenue as a static billboard. Plus, the gross margins are far better -- digital ads have an 85% gross margin compared to 70% for static. However, only 33.6% of Outfront’s total revenues came from digital revenues. Digital billboards will also become attractive to new types of customers. In the past, you will need to book months ahead of the time to book advertising spaces. Why? You need to print the billboard paper and hire a person to put it up. If you have a campaign down 8 weeks before, you will not have any luck getting into out-of-home. Now with digital, you can come to Outfront on a Friday evening and see your campaign on Saturday. That will become feasible for new customers who never advertised out-of-home before. So, the future of digital advertising may serve as a tailwind for Outfront Media. Bottom line: As a REIT stock, Outfront will offer a high dividend yield. You’d enjoy an 8.52% dividend yield if you buy the stock now. And remember, this yield is based on depressed earnings. As soon as Outfront begins to recover from its recent slump, the yield is poised to rise since the stock is required to pay out 90% of its earnings in dividends. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](