Stocks on Wall Street plummeted Friday as investors continued to sell tech stocks that had risen during the COVID-19 pandemic and turned into cyclical stocks likely to benefit from the reopening of the economy.
It posted a weekly loss of 4.9% and suffered its second negative week in a row, while declining 2.5%. It fared better with a decrease of 1.8%.
The US, meanwhile, rose to a one-year high above 1.6% at one point on Thursday, before pulling out on Friday to finish at around 1.41%.
Dow: SPX: COMPQ vs UST 10Y Daily
The next week is expected to be a busy week on Wall Street amid another string of high-profile earnings reports and more important economic data.
Regardless of which direction the market is heading, below we highlight one stock that is likely to be in high demand in the coming days and another stock that could see even more downsides.
However, keep in mind that our timeframe is for the next week only.
Stock to Purchase: Airbnb
Airbnb (NASDAQ 🙂 Shares – which have just entered their largest weekly profit since the company's IPO in December – so far in 2021 up about 39% since the beginning of the year. In comparison, the S&P 500 is up just 2% over the same period.
ABNB stock has more than tripled since its initial public offering at $ 68. Shares closed Friday at $ 206.35, not far from their all-time high of $ 219.88 reached on Feb. 11. At its current level, the San Francisco, California-based online vacation rental booking platform has a market capitalization of approximately $ 123 billion.
We expect the positive trend at ABNB to continue over the coming week, with the stock expanding its march to new record highs thanks to its growing status as one of the top names in the pandemic travel industry.
In the first publicly traded company, released last week, Airbnb posted a fourth quarter net loss of $ 3.89 billion, largely attributable to one-off costs associated with its IPO late last year.
Meanwhile, sales were $ 859.3 million, higher than the estimated $ 747 million, but still 22% lower than the same period a year ago. Important statistics, such as bookings and overnight growth, were also above expectations.
Despite mixed top-and-bottom-line numbers, Airbnb's fourth-quarter financial results still held up much better than other online travel companies, such as Booking Holdings (NASDAQ 🙂 and Expedia ( NASDAQ :), which saw Q4. sales fell by 63% and 67% respectively compared to the same period a year earlier.
"Our performance showed that Airbnb is resilient and inherently adaptable," said Chief Executive Brian Chesky in the Feb. 25 earnings announcement.
"Travel is coming back, and we're laser-focused on preparing for the rebound."
Although Airbnb did not provide guidance for the next few quarters, the company remains well positioned to capitalize on the anticipated recovery in the travel industry thanks to pent-up demand and the growing trend to work from anywhere.
Stock To Dump: DoorDash
DoorDash (NYSE 🙂 stocks, which debuted on the New York Stock Exchange in December, seem to remain in the background for the next week , as investors increasingly turn away from companies taking advantage of "stay-at-home" trading in anticipation of a wider economic reopening.
DASH closed Friday's session at $ 169.49, about 34% below its all-time high of $ 256.09 touched on January 27, earning the food delivery a valuation of $ 53.8 billion.
The Palo Alto, California-based company reported last week that it raised the alarm that it may just be a purely pandemic play that may have just gone public at its peak.
DoorDash said in its initial release as a publicly traded company that net losses more than doubled from the same period last year to $ 312 million, although that was mainly due to costs associated with the IPO last year. Sales, meanwhile, were up 226% over the same period last year to $ 970 million.
While the food delivery service saw a boom in demand in the fourth quarter, it warned that some of the tailwind it has enjoyed from personal eating restrictions in the US will fade and turn into headwinds as vaccinations increase and lockdowns in the whole country is declining.
“We hope the markets will open soon. When that happens, we expect a decrease in consumer engagement and average order value, although the exact amount remains unclear, ”the company said in the revenue report.
DoorDash gave a bleak forecast for 2021, setting marketplace gross order value (GOV) growth – a key sales measure – at 27.7% at the center of the guideline. That represents a sharp slowdown of 227% growth in GOV in the market in the fourth quarter.
With the continued nationwide rollout of vaccines expected to result in the reopening of a restaurant that will return to dining soon, it seems that DoorDash has already reached its peak.
