Opinion: Airbnb and DoorDash Offer Wall Street Different Post-Pandemic Futures as Stocks Move in Different Directions


Airbnb Inc. and DoorDash Inc. went public in late 2020, then jumped into the earnings stage for the first time as a couple on Thursday to report similar giant quarterly losses.

But that’s where the similarities between the two end. DoorDash shares plunged more than 11% in after-hours trading on Thursday, while Airbnb shares rose slightly after the pair reported earnings that looked much worse than they actually were due to high trading costs. Stock compensation associated with IPOs. And the perspectives of Airbnb ABNB,
-9.06%
it is much brighter than DoorDash DASH,
-5.36%,
that it may just be a pure pandemic work that was made public at its peak.

DoorDash, which delivers food from restaurants, grocery stores, and small markets using independent contractors, gave a murky outlook for 2021. The company reported a considerable loss of $ 312 million in the fourth quarter, primarily due to its $ 322 million in costs of delivery. Stock compensation associated with its public offering last year, even though its revenue soared more than 200% to $ 970 million and was better than Wall Street had expected.

Read more about DoorDash and Airbnb IPOs

However, as vaccine counts rise and closures across the United States end, consumers can choose to walk or drive to their favorite restaurants to pick up take-out orders, or dine outside as the weather improves, or indoors. , if you can. DoorDash acknowledged that reality, but still predicted that gross order volume will grow strongly in 2021, to a range of $ 30 billion to $ 33 billion, from less than $ 25 billion in 2020.

“Behind our guidance for 2021 is the assumption of accelerated market reopens and a return to in-store meals,” DoorDash CFO Prabir Adarkar told analysts on the company’s earnings call. “While we have seen many positive signals from consumers and markets temporarily reopening during the pandemic, we recognize that vaccination and full reopens could lead to more abrupt changes in consumer behavior than current data would predict.”

DoorDash also faces pressure on both ends of its business model: restaurants who feel they are paying too much and drivers who feel they are not getting enough salary and benefits. DoorDash executives said they do not expect commission limits set by 73 jurisdictions to be upheld when “in store” dinner resumes, noting they were tied to “emergency orders.” Executives said that even with the meager worker protections established by California’s Proposition 22, the vast majority of costs associated with the new law will be “absorbed” into the company’s balance sheet, while also “being passed on throughout certain instances. “

DoorDash also intends to launch more expensive campaigns for similar laws elsewhere.

On the other end of the spectrum is the Airbnb report. In Thursday’s results, Airbnb reported a loss of nearly $ 4 billion in the fourth quarter, but its 2020 revenue did not plummet as much as company executives had projected earlier in the year. In the worst part of the pandemic, Airbnb had predicted to investors that its 2020 revenue would likely reach half of 2019 revenue.

But it turned out that many people were left working at home due to the pandemic and were able to change the scene by staying in an Airbnb rental, often simply by driving to a nearby city.

“In the face of the biggest crisis ever seen in the travel industry, our business proved resilient and our model was able to adapt,” Airbnb co-founder and CEO Brian Chesky told analysts. He said that in the last year, many people are living more nomadically, due to their flexibility at work.

“Despite the fact that borders were closed and international travel was reduced, many people found longer stays on Airbnb,” Chesky said. “Since they worked from home, they were flexible. Many people want to get in a car to travel nearby and stay in a local community. “

Airbnb also had good news for Wall Street on the spending front, noting that its selling and marketing expenses, as a percentage of revenue in 2021, will be below 2019, a year in which it had high levels of marketing. Airbnb is doing better than other travel-focused companies. Expedia Group Inc. EXPE,
-3.44%,
which owns rival VRBO, said in its earnings call earlier this month that it saw an overall improving trend in its fourth quarter, driven by VRBO, but declined to disclose any specific results for analysts. The online travel company reported net income and losses in the fourth quarter that fell about 64%.

Airbnb is set to win if the pandemic continues and also if (or when) it ends. But DoorDash may have seen years of growth compressed into a few months, and what comes next is uncertain, no matter how confident its executives sounded Thursday.

The effect of the pandemic on certain companies is clearly not as predictable as many thought. With the gradual rollout of the vaccine expected to help boost some travel and some restaurant dining again, it appears Airbnb is emerging as another winner, while DoorDash may have experienced its peak.

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