Here are my top growth stocks to buy now

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My top growth stock to buy now is a booming travel agency as consumers release pent-up demand to get out of their homes. Airbnb (ABNB -5.37%) is experiencing an increase in customer spending that could last for some time.

The asset-light sector offers advantages over traditional hotels and resorts, with customers choosing it over competitors. Airbnb’s stock is relatively cheap, and the rebound in consumer travel still has a long way to go.

Travel rebound is great news for Airbnb

Notably, Airbnb operates as a travel facilitator. This means that he does not own any properties listed on his platform. It connects travelers looking for a place to stay with hosts looking for people to rent their spaces. Airbnb makes transactions easy. For his services, he takes a percentage of all sales on the Airbnb platform. Of course, the business was devastated at the start of the pandemic when travel was halted. Airbnb’s revenue fell 30% in 2020.

According to Statista, consumer spending in hotels and resorts fell below $1 trillion in 2020, from $1.5 trillion in 2019. As economies reopened, travel restrictions eased and COVID-19 vaccinations became widespread, travel spending rebounded in 2021. Airbnb capitalized on this trend, and revenue soared 77% in 2021. The market is expected to reach $1.1 trillion in 2022.

ABNB Revenue Data (Quarterly) by YCharts

Still, travel spending is nearly $400 billion lower than before the pandemic, suggesting more room for this rebound to last, and Airbnb can ride that wave higher. In the first half of 2022, Airbnb recorded sales of $3.6 billion. During the same period last year, he earned $2.2 billion. The surge in sales has allowed Airbnb to take the turn of profitability. Last year it lost $498 million in operating revenue – this year it gained $364 million.

But it’s not just the rising tide that drives Airbnb higher. The company’s travel-friendly business model has encouraged millions of hosts to list unique properties that attract guests. Travel is rarely a one-time transaction, but that’s how most hotels and resorts are built – with cookie-cutter rooms. On Airbnb, people can rent a room in an apartment or an entire house in the suburbs, depending on their needs. The customer value proposition is proving advantageous as Airbnb’s revenue has grown faster than the industry.

It’s a great time to buy Airbnb stock

Chart of ABNB Price to Free Cash Flow

ABNB Price to Free Cash Flow Data by YCharts

In addition to its excellent outlook, Airbnb’s stock is relatively cheap. With its price-to-earnings ratio of 68 and price-to-free cash flow ratio of 52, people can now buy Airbnb’s shares at prices close to their lowest prices by those metrics. It’s no surprise that Airbnb is my top growth stock to buy right now.

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