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More Than 25 Brokerages Began Coverage Of Airbnb, DoorDash, Signaling Hopes For Growth

Numerous brokerages initiated coverage of Airbnb and DoorDash on Monday (Jan. 4), showing the high hopes for those companies’ revenue growth, Reuters writes.

Both companies have also had notable valuations since their IPOs in December, Reuters writes, with Airbnb valued at just over $100 billion and DoorDash seeing a quadrupling of its valuation from an earlier funding round.

Reuters writes that these high numbers show a continuing appetite among brokerages for tech firms. Over 25 brokerages expressed interest, Reuters writes. Morgan Stanley, Goldman Sachs, BofA and more led a 37-firm underwriting group for Airbnb, and DoorDash was the recipient of a 12-firm syndicate led by Goldman Sachs and J.P. Morgan Chase, Reuters writes.

Both Airbnb’s home rental service and DoorDash’s food delivery are app-based, and analysts say there will be even more growth as travel restrictions ease and the expansion of the global food delivery economy continues.

That said, analysts from BofA expressed concern about Airbnb’s valuation, “given that Airbnb services are not new … and competitors Booking and VRBO have solid positions in their ‘home’ markets,” Reuters writes.

Of DoorDash, the analysts said the premium multiples were warranted because of the company’s greater scale and share gains. But the analysts said growth could slow in 2021.

Airbnb took a hit due to the pandemic early on but was able to recover later in 2020 due to cutting costs.

Platform companies have been doing well on the IPO market as of late, with the allure coming from the vast and loyal client bases, PYMNTS writes. Airbnb reported 84 percent of revenues came from hosts with at least one check-in prior to Dec. 2018, and 79 percent of hosts coming directly to the company platform to sign up. And the company saw more bookings as 2020 went on, even in spite of travel restrictions.

In the case of DoorDash, the company was reported to be valued twice that of Uber and saw shares trading higher in early December.

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