Evercore ISI maintained Airbnb (NASDAQ:ABNB) at Outperform ahead of the company’s upcoming quarterly report with $160 Price Target on the shares, although it also reiterated the stock as a member of its “Tactical Underperform” list for this quarter, citing “YTD share price performance, relative valuation, and a few travel softening datapoints.”

In their preview of the company’s Q1 readout, the analysts believe ABNB’s numbers “should be able to maintain course,” and view “the Street’s Q1 Bookings (up 17% Y/Y), Revenue (up 19% Y/Y and around mid-point of guidance) and EBITDA (14% margin) as ballpark reasonable,” citing strong industry checks “up through the beginning of March.”

Nonetheless, the analysts also note the “softening demand trends later in the quarter”, as well as mixed “read-through from BKNG and EXPE earnings” could be warning signs, and present challenges for the company down the road.

They see “the risk of a recession, the discretionary nature of leisure travel, and increasing competition continue to be concerns that drive potential downside risk to H2:23 estimates,” although does acknowledge management’s “efforts to improve the affordability of travel.”

Overall, they express a cautious near-term sentiment for the shares “out of our concern that the near-term risk-reward on ABNB shares is tilted to the negative, given YTD share price performance, relative valuation, and a few travel softening datapoints.”

Evercore ISI maintains ABNB at Outperform with $160 Price Target, but keeps the stock on its “Tactical Underperform” list over near-term challenges.

Airbnb is set to report Q1 earnings tomorrow, on Tuesday, May 10th, after the market closes. The analysts expect the company to post EPS of $0.08 on revenue of $1.79B.

ABNB closed at $119.90 on Friday, and is up over 40% YTD.