Wall Street bets on solid revenue growth from Airbnb and DoorDash By Reuters

© Reuters.  U.S. stocks lower at close of trade; Dow Jones Industrial Average down 0.88%

© Reuters.

By Noor Zainab Hussain and Tanvi Mehta (Reuters) – A slew of brokerages began covering Airbnb Inc and DoorDash Inc on Monday, with high hopes for their revenue growth and backing the jaw-dropping valuations obtained by both last month on launches. stock markets. Home rental company Airbnb was valued at just over $ 100 billion at the time of its market debut in the largest US initial public offering (IPO) of 2020, while the delivery company DoorDash food was valued at more than four times its value in a previous fundraising round. . IPOs underscored investor appetite for tech companies, both app-based, and analysts predict steady growth as travel restrictions ease and the global food delivery business continues to expand. More than 25 brokerages started hedging in the two companies, after the expiration of a mandatory blackout period. Morgan Stanley (NYSE :), Goldman Sachs (NYSE :), BofA and others led a 37-firm underwriting group for the Airbnb IPO, while Goldman Sachs and JP Morgan led a 12-firm syndicate on the DoorDash offering. Credit Suisse (SIX 🙂 expects behavioral changes driven by the pandemic to accelerate the shift from hotels to alternative accommodations and analysts see ample opportunity for Airbnb to increase monetization in the long term. Analysts at Jefferies (NYSE 🙂 expect a return to 2019 bookings and revenue levels for the second half of 2021 and double-digit growth through 2025, with annual earnings expected by 2022. Airbnb’s revenue fell 18 % in the third quarter of 2020, but they made a profit, helped mainly by cost cuts. Analysts at Piper Sandler (NYSE 🙂 were similarly bullish on DoorDash. “We believe DoorDash has an opportunity to achieve ‘super app’ status in the home delivery market, with a better business model (in our opinion) than Uber (NYSE 🙂 rated Neutral,” said analysts at Piper Sandler. MILD EXPECTATIONS Bofa analysts, however, raised concerns about Airbnb’s valuation. “We see Airbnb’s valuation (against its peers) as the biggest equity concern given that Airbnb services are not new … and competitors Booking (NASDAQ 🙂 and VRBO have strong positions in their ‘local’ markets, they said. Bofa also said DoorDash’s premium multiples are guaranteed given its larger scale and equity gains, but warned of slowing growth pushing valuation in 2021. Brokers that did not participate in IPOs had previously downgraded their prices. shares, based on its valuations, and Citron Research said DoorDash’s IPO “was the most ridiculous IPO of 2020.” Airbnb shares rose 2.4% to $ 150.30 on the Nasdaq, while shares DoorDash slipped marginally to $ 142.18 on the New York Stock Exchange.

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