Airbnb (ABNB  ) reported Q4 earnings that topped analysts' expectations on the top and bottom-line, sending shares higher by more than 3%. The company noted some slowing in bookings and an increase in cancellations due to the omicron variant, however recent trends are very strong. The company expects bookings in the upcoming quarter to exceed pre-pandemic levels by a healthy margin.

Given the rebound in growth stocks and the outperformance of the travel sector in recent weeks, it's not surprising that Airbnb is one of the best-performing stocks since the January 24 low with a 38% gain. Overall, the stock is down 15% from its all-time high in February.

Inside the Numbers

In Q4, Airbnb reported a profit of $0.08 per share, beating estimates of $0.03 per share. Revenue also beat at $1.53 billion vs $1.46 billion which was a 78% increase from last year.

Equally important, the company sees Q1 bookings to exceed Q1 2019 levels. Its forecast of $1.45 billion in Q1 revenue also beat analysts' estimates of $1.24 billion. Average daily rates were 20% higher, indicating Airbnb's pricing power.

In total, it reported 73.4 million nights and experiences booked in Q4 which was 8% lower than last quarter and slightly below estimates. However, it was still 59% higher than last year when the pandemic was ravaging the travel industry.

Airbnb had a secular growth component but now has a powerful cyclical tailwind as well. Omicron was more of a road-bump that it seems to be already over, while previous outbreaks led to drops in bookings that didn't recover quickly. Currently, summer bookings are 25% above 2019, and there are anecdotal reports of people having trouble finding open dates.

The company has also noted an increasing trend towards people booking longer stays and working during the trip which is now increasingly possible due to "remote work". Over the last 2 years, trip length has increased by about 15% with stays of more than 7 days accounting for half of bookings. Longer stays of more than 28 days is the fastest-growing category and now accounts for 22% of all bookings.

Overall, Airbnb seems to have all the ingredients of a bull market leader especially if the recovery in travel is going to be as strong as expected. The company certainly remains expensive with a $122 billion market cap and a P/S multiple of 23, so it could certainly see some selling if conditions start deteriorating for growth stocks. However, it's the leader in a new category with a great business model that seems primed to grow at a double-digit rate over the next decade and could see an acceleration in growth in the coming years.