Airbnb (ABNB  ) shares were 4% lower following the company's second-quarter earnings report despite the company exceeding expectations on the top and bottom line. The negative reaction was likely due to management's commentary about seeing a slowdown in bookings due to the Delta variant.

Despite this headwind, it still expects to reach a new record high for revenue in Q3. And, shares recovered losses in ensuing sessions as well. Overall, Airbnb shares are essentially back to their opening IPO print. Many were anticipating that the stock would benefit from the reopening trade, but it largely tracked other growth stocks and underperformed in recent months.

Inside the Numbers

In Q2, Airbnb reported a loss of $0.11 per share, slightly better than expectations of a loss of $0.18 per share. Revenue also beat at $1.34 billion, topping forecasts of $1.26 billion and a nearly 300% increase over last year. It also reported 83.1 million nights and experiences booked, a 29% increase from Q1 and 197% higher than last year when bookings collapsed due to the pandemic and ensuing shutdowns. Analysts were looking for 79.2 million nights and experiences booked.

The company's costs were also higher than expected as sales and marketing expenses increased by 175% to $315 million. Overall, Airbnb's net loss for the quarter was $68 million which was significantly better than 2020's Q2 loss of $575.6 million. The average daily rate reached $161, a $1 increase from the previous quarter and 41% higher than last year.

The one downbeat was management's warnings about early trends in Q3 due to the delta variant. It said that travel behavior may be negatively affected and could lead to a surge in bookings. However, it still expects a new record in terms of Q3 revenue but that the total number of bookings on the platform will be less than 2019 due to the virus' resurgence.

Stock Price Outlook

Despite its stock price being flat since its IPO about 9 months ago, Airbnb is more appealing today as its business has nearly fully recovered. It's evident from expectations of a new record in terms of revenue in Q3 and from the company's loss narrowing and likely turning profitable sometime in Q4 or Q1 next year.

Thus, investors should keep the stock on the radar as it could be one of the first to bounce back if or when the Delta variant surge peaks. It remains quite appealing in terms of its growth potential, rich margins, and marketplace business model which has dominated the recent list of winning stocks.