Shopify & Airbnb earnings tell different stories about the consumer.

Wall Street is seeing mixed insight into the state of the consumer as Shopify (SHOP) and Airbnb (ABNB) posted contrasting earnings. Wedbush Securities equity research analyst Scott Devitt joins Market Domination to discuss those earnings and what they signal about the state of consumer spending.
Devitt notes that travel companies are under pressure, as Airbnb, for one, saw shortened booking windows. Consumers are making decisions later in the planning process, indicating economic weakness. As other consumer brands like Shopify, Uber (UBER), and Meta (META) posted strong earnings, he questions whether the weakness could be isolated to travel or if this is the beginning of a broader trend.

Despite Shopify topping earnings expectations, Devitt has a Neutral rating on the company, explaining, "It's just very expensive because of the way that investors look at. They look at it like a software company, but it doesn't have software company margins. So it tends to trade at a very high multiple relative to other companies that are in similar businesses across the consumer internet."

Meanwhile, he sees Airbnb in a "transition period" as their core business slows, and explains, "they need to get to the next thing, whether the next thing is the core reaccelerating through investment or growth in newer international markets or expansion through experiences relaunching in 2025 or better take rates because of the implementation of the cross-border fees that they've just instituted. One of those things needs to take over so that the business can sustainably grow in the double digits."

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