Wall Street places bet on solid revenue growth for Airbnb, DoorDash
By Noor Zainab Hussain and Tanvi Mehta (Reuters) - A slew of brokerages initiated coverage of Airbnb Inc and DoorDash Inc on Monday, having high hopes for their revenue growth and supporting eye-popping valuations obtained by both last month in stock market launches. Home rental firm Airbnb was valued at just over $100 billion at the time of its market debut in the biggest U.S. initial public offering (IPO) of 2020, while food delivery company DoorDash was valued at more than four times its worth at an earlier fundraising round
By Noor Zainab Hussain and Tanvi Mehta
(Reuters) - A slew of brokerages initiated coverage of Airbnb Inc and DoorDash Inc on Monday, having high hopes for their revenue growth and supporting eye-popping valuations obtained by both last month in stock market launches.
Home rental firm Airbnb was valued at just over $100 billion at the time of its market debut in the biggest U.S. initial public offering (IPO) of 2020, while food delivery company DoorDash was valued at more than four times its worth at an earlier fundraising round.
The IPOs underscored investor appetite for technology firms, with both being app-based, and analysts are predicting steady growth as travel restrictions ease and the global food delivery business continues to expand.
More than 25 brokerages initiated coverage on the two companies, after the expiry of a mandatory lock-in period. Morgan Stanley, Goldman Sachs, BofA and others led a 37-firm underwriting group for Airbnb's IPO, while Goldman Sachs and JP Morgan led a syndicate of 12 firms on DoorDash's offering.
Credit Suisse expects pandemic-driven changes in behavior to speed up the shift away from hotels to alternative accommodations and the analysts see ample opportunity for Airbnb to increase monetization in the long term.
Jefferies analysts expect a return to 2019 bookings and revenue levels by the second half of 2021 and double-digit growth through 2025, with annual profits expected by 2022.
Airbnb's revenue fell 18% in the third quarter of 2020, but it turned a profit, helped mainly by cost cuts.
Piper Sandler analysts were similarly bullish on DoorDash.
"We think DoorDash has a shot at achieving "super app" status in the doorstep delivery market, with a better business model (in our view) than Neutral-rated Uber" Piper Sandler analysts said.
Analysts at Bofa, however, expressed concern over Airbnb's valuation.
"We see Airbnb's valuation (versus) peers as the biggest stock concern given that Airbnb services are not new ... and competitors Booking and VRBO have solid positions in their "home" markets," the analysts said.
Bofa also said DoorDash's premium multiples are warranted given its greater scale and share gains, but warned of slowing growth pressuring valuation in 2021.
Brokerages not involved in the IPOs had earlier downgraded the stocks, based on their valuations, with Citron Research saying that DoorDash's IPO "was the most ridiculous IPO of 2020".
Shares of Airbnb were up 2.4% at $150.30 on the Nasdaq, while DoorDash's stock was down marginally at $142.18 on the New York Stock Exchange.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Bernard Orr)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
By Aditya Kalra NEW DELHI (Reuters) - India's tobacco industry will object to a proposal to ban smoking zones in hotels and prohibit advertising at cigarette kiosks as the government steps up anti-smoking efforts, two executives said on Wednesday. India has over the years introduced tobacco controls and launched campaigns to deter its use, but enforcement of the law has been a challenge.
HONG KONG (Reuters) - Over 50 pro-democratic activists in Hong Kong were arrested on Wednesday for breaking the city's contentious national security law, local media reported, in the biggest crackdown yet against the democratic opposition under the new law. The arrests in the Asian financial hub included well known democratic figures and former lawmakers James To, Lam Cheuk Ting and Lester Shum, according to the Democratic Party's Facebook page and public broadcaster RTHK. Police did not immediately respond to requests for comment.
BRASILIA (Reuters) - Brazil's syringe manufacturers said on Tuesday they will supply 30 million syringes and needles for the country's COVID-19 vaccination program after the government said it would requisition surplus supplies. Executives of the three main manufacturers met with President Jair Bolsonaro at the Health Ministry and it was agreed that each would supply 10 million syringes to cover the initial stages of the vaccination plan.