Airbnb and DoorDash - first earnings as public
Home-rental site Airbnb is the top-performing IPO in the past 12 months, excluding foreign companies and listings that raised below $1 billion.
Airbnb generated $4.8 billion in revenue in 2019. When the pandemic hit, the rental sharing company’s revenue dropped 32% year-over-year to $2.5 billion. Since going public in December, Airbnb’s stock has surged over 200%, fuelled by optimism on the prospects in a post-pandemic world. Many will look to Airbnb to see how the hotel industry is recovering, as the leisure sector continues to be one of the hardest-hit industries.
Airbnb is expected to report revenue of $747 million for the period, and an adjusted loss of $3.09 billion, or $9.66 per share, according to the average of estimates compiled by Bloomberg.
Meanwhile, in 2019 DoorDash brought in $885 million, and its earnings skyrocketed 226% year-over-year to $1.92 billion in the first nine months of 2020.
Food delivery is thriving—a boon for DoorDash, which currently dominates in the US with a 56% market share. But like other food delivery companies, DoorDash has been unprofitable since its founding, and the market is highly saturated. But there’s still a lot of room for growth globally.
DoorDash is seen reporting revenue of $926.7 million and an adjusted loss of $265.3 million, or 80 cents a share, according to Bloomberg.
While the earnings will be important for investors to gauge how the two are managing their operations, investors will be looking for comments about the future, when lockdowns ease, vaccines become more widespread and people begin traveling and going to restaurants again.
Airbnb is expected to benefit from the waning days of the pandemic as people venture further from home while DoorDash has seen a boom from more delivery orders while people ordered in.
While the companies might see some turbulence in the coming days, depending on the results, the reports might also trigger early expirations for both companies’ six-month lockup periods that would release millions of shares from selling restrictions at the beginning of March. The earnings reports and commentary will serve as a key test for the run-up in shares.
Airbnb was among the hardest-hit companies of the pandemic and almost shelved its IPO plans as travel shut down nearly a year ago. By April, room bookings and experiences had plunged 72%. But by the summer, Airbnb was seeing signs of a rebound as people ventured out of cramped apartments and took advantage of work-from-home policies to rent homes near the beach or mountains. The company has said it anticipates a regional travel boom in 2021 as people take trips more within driving distance and explore more rural areas rather than the crowded tourist hotspots of the before-Covid era.
While exactly when people will feel ready to travel is hard to predict, vaccine distribution will likely play a large role in determining traveler behavior. Meanwhile, as Airbnb suffered from the pandemic initially, DoorDash seized on the food delivery boom in 2020. DoorDash expanded its market share to surpass 50% of the U.S. last month, up from 35% in January 2020. A strong presence in the suburbs helped DoorDash weather the lockdowns, as many in the US fled from cities.
With 5 million subscribers to DashPass, a delivery subscription service, DoorDash may have a better revenue stream than some of its competitors as Covid-19 restrictions fade in the U.S. Investors will be looking at order totals in DoorDash’s report as signs of continued robust demand.
Should you buy or sell Airbnb stock?
The current consensus among 34 polled investment analysts is to hold stock in Airbnb. The 26 analysts offering 12-month price forecasts for Airbnb Inc have a median target of 158.00, with a high estimate of 240.00 and a low estimate of 120.00. The median estimate represents a -13.61% decrease from the last price of 182.90, according to CNN Business.
Should you buy or sell DoorDash stock?
The current consensus among 19 polled investment analysts is to hold stock in DoorDash Inc. This rating has held steady since January when it was unchanged from a hold rating. The 16 analysts offering 12-month price forecasts for DoorDash Inc have a median target of 170.00, with a high estimate of 210.00 and a low estimate of 100.00. The median estimate represents a -1.23% decrease from the last price of 172.12, according to CNN Business.