Airbnb, DoorDash Get New Wall St. Champion on Market Dominance

(Bloomberg) -- Susquehanna Financial Group issued a seal of approval to two of Wall Street’s most high-profile recent IPOs, starting coverage on both Airbnb and DoorDash with positive ratings, citing the pair’s dominance in their respective markets.

The firm issued price targets of $180 for Airbnb and $185 for DoorDash; in both cases, those are the highest on the Street.

Airbnb is the “clear leader” in the “large and growing short-term rental market,” analyst Shyam Patil wrote; its brand “is synonymous with short-term rental, which should give it an enduring advantage in both traffic and supply.”

Susquehanna added that Airbnb “has created a powerful flywheel for its two-sided marketplace,” referring to guests and hosts, and this “enables the company to generate the significant majority of its traffic directly,” an “unparalleled” trait within online travel companies.

Separately, the firm wrote that DoorDash is the “dominant player” in the food-delivery business and that, despite intense competition, its moat is “strong and sustainable.” The company is “well-positioned for continued expansion into new verticals,” including grocery products, “enabling DASH to continue to rapidly grow revenue and expand margins.”

Susquehanna’s bullish view comes one day after short-seller Citron Research slammed DoorDash’s IPO as the “most ridiculous” of the year, and called it grossly overvalued.

Shares of Airbnb started trading earlier this month and have subsequently soared, rising about 116%. DoorDash is up more than 50% from its IPO, also earlier this month. Shares of Airbnb gained 3.4% before the market opened on Friday while DoorDash fell 2.1%.

According to data compiled by Bloomberg, Airbnb has three buy ratings, one hold and two sells. The average price target is nearly $111, which implies downside of about 25% from its last close.

Currently, two firms tracked by Bloomberg recommend buying DoorDash while three have hold ratings. The average price target is $155, or roughly where the stock last closed.

©2020 Bloomberg L.P.