It's a bet on margin expansion + growth. It's quite reasonable that ABNB could achieve 30%+ operating margins at scale. That along with some modest growth would mean a $100b valuation is on the higher end of reasonable, but not entirely unreasonable given the company's moat and potential.
Also if they reach that level of profitability you have to factor in things like buyback programs which for big tech companies tend to be very healthy. With buybacks the valuation doesn't necessarily need to expand for you to make money on your investment.
This is just my opinion, but I tend to think it's better to over pay a little for quality companies because at worse you might buy something that's a bit overvalued, but over the long-term your investment will probably still work out well. If you look for companies that are cheap you often buy trash and in those cases you can end up with far worse returns over longer periods of time.
For what it's worth I've been looking to invest in ABNB for a while and although I don't think the valuation is too unreasonable the risk/reward still isn't there for me personally.
Also if they reach that level of profitability you have to factor in things like buyback programs which for big tech companies tend to be very healthy. With buybacks the valuation doesn't necessarily need to expand for you to make money on your investment.
This is just my opinion, but I tend to think it's better to over pay a little for quality companies because at worse you might buy something that's a bit overvalued, but over the long-term your investment will probably still work out well. If you look for companies that are cheap you often buy trash and in those cases you can end up with far worse returns over longer periods of time.
For what it's worth I've been looking to invest in ABNB for a while and although I don't think the valuation is too unreasonable the risk/reward still isn't there for me personally.