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Earnings preview: Airbnb prepares for a rebound, DoorDash seeks elevation

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As investors awaits DoorDash and Airbnb Q1 earnings, Julie Hyman, Brian Sozzi, and Myles Udland talk with Wells Fargo Securities senior analyst Brian Fitzgerald about how the post-pandemic world could affect these companies moving forwar

Video Transcript

MYLES UDLAND: We continue to see earnings season kind of trail off here, but tomorrow, we're getting a couple of big consumer names out with their latest quarterly reports. That is DoorDash and Airbnb joining us now. And to discuss what to expect from both companies' reports is Brian Fitzgerald, senior equity analyst over at Wells Fargo.

Brian, let's start with the name that you more recently commented on in a note to clients. And that is DoorDash. How are you thinking about the name here ahead of this quarter? And I guess, how are you thinking about the state of the kind of pandemic delivery play? Uber discussed Eats within their business. And how does DoorDash kind of fit into your thinking there?

BRIAN FITZGERALD: Yeah, great. Thanks, Myles, and thanks for having us. Look, both these two names we're talking to, Dash and Airbnb have become an iconic noun, verb status levels in terms of how we refer to them, similar to Uber and Lyft and Google. As you point out, for Dash, we expect a strong brand is going to continue to resonate. We recently looked at app sessions in the month of April, March, February, January. They remain elevated.

We do believe that investors will have a more favorable entry point once the second half comps de-risk. And you're coming off some torrid pace of growth in 2020. Order values up 200% year over year, revenue up 225%. That's going to normalize for '21 to 35% growth. For the quarter specifically for Dash, we expect $9.1 billion in order value and 100-- sorry, $1.05 billion in revenue, a consistent take rate. And don't forget, they are profitable versus the other delivery names. So we see 23 million in EBITDA. The Street is ranging between 48 and 23.

JULIE HYMAN: Hey, Brian, it's Julie here. So I'm less interested in DoorDash's last quarter and more about what happens in the second half, right, as people get out more to restaurants in particular. And it sounds like you think DoorDash is well positioned against competitors. But how is it positioned sort of in the world? And how much of a slowdown do you think they're going to have?

BRIAN FITZGERALD: Yeah, it's a great question, Julie. So, you know, we highlight Dash is unique in that it's high growth and it is profitable. It has the national market share leadership in terms of meal delivery. It's 2x what Uber does in terms of gross order value. When we look at the National Restaurant Association, they found that even though vaccines are becoming available and people are returning to restaurants and consumers will continue to desire, despite that, off-prem options, survey work says 68% of people are more likely to purchase takeout. 53% say takeout or delivery has become essential to the way they live.

So, one way we refer to what happened in the pandemic is, we had these macro shifts in secular growth. And it's a one-way ratchet. When the macro situation ameliorates or dissipates, you don't go back to necessarily the old way of doing things when you found a more efficient way to do stuff. So we do think that you're going to continue to have strong growth, secular growth in food delivery. It is going to comp against really strong growth numbers from 2020.

BRIAN SOZZI: And Brian, on Airbnb, we've talked to the CEOs of Marriott and Booking Holdings recently. And they both say they're seeing a strong rebound in leisure travel. And they have the numbers to back that up. What is that recovery or demand to stay in a hotel? What does that mean for an Airbnb this year?

BRIAN FITZGERALD: So, on Airbnb, I think coming from the Expedia results and the Booking results we saw last week, we do see strength in VR, in the US specifically. Airbnb will see benefits from those trends as well. Ideally, we'd like to see stronger reopenings in Europe and elsewhere, especially given Airbnb's international and urban mix. We expect $4.6 billion in bookings for the quarter, revenue of $710 million, and a gap EPS loss of $1.35. And that's based on 60 million room nights that's growing 5% year over year. ADRs are about $128, $129. That's up about 8% year over year.

Importantly, we do see signs of-- Air DNA is one of the channel checks we make. And they've shown the strongest US short-term rental occupancy rates on record, 61% occupancy driven overwhelmingly by resort, rural, and less dense urban markets.

JULIE HYMAN: Hey, Brian, aside from the fundamentals of Airbnb's business, how big of a problem is the lockup expiration that's coming, what, I think it's May 17th is where people are looking for. What are you expecting in terms of that lockup effect? Do you think that that's when it's coming? And what effect is it going to have in the stock?

BRIAN FITZGERALD: Yes, so that's a great question. The lockup will come on the Monday following the Thursday of a report. You do have five big insiders with big enough stakes to have limits placed on them with respect to Rule 144. So that's five times 18.4 million shares. You have another 14 million from remaining insiders not under 144. So that gets you to 106 million.

And then you have class B shares also from the 10 K. Those are running at 478 million. So max would be 245 million shares unlocking. We don't think it's going to be near that. It's probably going to be about half of that. But that's a weighty unlock. And to your point, as we kicked off the segment, these are newer issuances. So these are things that investors need to be aware of.

MYLES UDLAND: All right, Brian Fitzgerald, senior analyst over at Wells Fargo. Brian, appreciate the time this morning. I hope we'll stay in touch.

BRIAN FITZGERALD: Thanks, guys. Appreciate it.