Airbnb (NASDAQ: ABNB) has had a rocky time as a public company. It first went public in December 2020, and in just a few months the company's share price surpassed $200. However, it has since plummeted due to the widespread sell-off among fast-growing companies, and shares have fallen over 45% from that high.\nShares continued to sink since the company released its first-quarter earnings report, which was largely upbeat. Here's why this drop might be a buying opportunity, and what the company's great quarter signals for its long-term success.\nAirbnb is capitalizing on pent-up travel demand\nRecord-high demand for travel has been sweeping the U.S. over the past few months, and Airbnb was able to capitalize on that. The company saw the number of nights and experiences booked on its platform reach a quarterly record of 103.7 million, which grew 25% compared to the year-ago period.\nThis translated into impressive financial results for the company. Revenue in Q2 soared 58% higher year-over-year to $2.1 billion, but what really shined was the company's profitability. Net income in Q2 reached $379 million, while free cash flow topped $795 million, representing margins of 18% and 38%, respectively. This marked the second-highest quarterly net income Airbnb has recorded over the past three years, showing an improving trend toward sustained profitability.\nWhat's even more remarkable is that Airbnb believes that it will continue riding the tailwinds of pent-up travel demand over the coming quarters. Management expects Q3 revenue to grow 26.5% year-over-year to $2.83 billion, and trip reservations for the fourth quarter are also looking strong.\nDue to continued COVID-19 lockdowns, travel demand in China and the rest of Asia Pacific is high, yet activity remains depressed. The company is focused heavily on capitalizing on this. Airbnb believes that outbound travel demand from consumers in China could spike as lockdowns subside, and Airbnb's CEO Brian Chesky is preparing for that:\nA way to prepare for the China outbound business is to make sure we have really great supply in the quarters where people in China are traveling to. This includes Japan and Korea, Southeast Asia, and beyond. The next thing is just making sure that once people are ready to travel, our product is continuing to be updated, and we have the marketing campaign ready to go.\nIts innovation is paying off\nCreating a product that consumers love has been a cornerstone of Airbnb, and this quarter started to show signs of this tenet paying off. One of the recent innovations Airbnb has made is AirCover, which offers free top-to-bottom coverage for both hosts and guests. For hosts, it protects against damage, provides liability insurance, and more. For guests, it protects against unexpected host cancellations and listings that aren't as advertised, while ensuring safety when vacationing with Airbnb.\nWhile they might seem small, these additions have been very valuable for Airbnb. The company's host Net Promoter Score (NPS) jumped 70 points since it introduced AirCover for hosts last year. Additionally, AirCover for guests has led to 10% more rebookings.\nThe company has plans to announce even more innovations this winter, showing its continued drive to create the best platform in the industry for both consumers and hosts.\nIs Airbnb a buy?\nOne announcement that invigorated investors this quarter was the company's buyback program, allowing Airbnb to repurchase up to $2 billion of stock. Some investors might have reservations about this, and would prefer that Airbnb invests this money into innovation. However, with $9.9 billion in cash and securities on the balance sheet, Airbnb can afford to do both.\nDespite these stellar financial results, the company is trading at an inexpensive price. Shares trade at 25.6 times free cash flow, far below other traditional hospitality stocks like Marriott International (NASDAQ: MAR) and Hilton Worldwide (NYSE: HLT).\nNot only does the short term look appealing, but so does the long term given Airbnb's commitment to innovation. This could allow the company to take market share over rivals that don't have the same focus on consumers and hosts. Add on top of this the company's sustained cash generation and profitability, and Airbnb looks poised to innovate more than anyone in the space.\nAt this deflated valuation, Airbnb looks like a bargain. I plan to add more shares to my portfolio soon, and you might want to consider doing the same.\n10 stocks we like better than Airbnb, Inc.\nWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*\nThey just revealed what they believe are the ten best stocks for investors to buy right now... and Airbnb, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.\n*Stock Advisor returns as of July 27, 2022\nJamie Louko has positions in Airbnb, Inc. The Motley Fool has positions in and recommends Airbnb, Inc. The Motley Fool recommends Marriott International and recommends the following options: long January 2023 $115 calls on Marriott International. 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