Airbnb and DoorDash sink as analysts turn skeptical of massive IPO rallies

• Airbnb and DoorDash shares fell on Monday after analysts downgraded the newly public companies' stock.
• Both firms surged last week as outsized demand pushed prices well above their IPO levels.
• Gordon Haskett downgraded Airbnb to "underperform" from "buy," and expects shares to fall roughly 20% from current levels.
• DA Davidson lowered DoorDash to a "neutral" rating from "buy," adding that the company's stock price leaves little room for future error.
• Watch DoorDash trade live here.
• Watch Airbnb trade live here.

Airbnb and DoorDash both tumbled on Monday as analysts downgraded ratings following both firms' colossal public-market debuts.

Airbnb sank as much as 10.1%, while DoorDash plunged 13.6% at intraday lows. The two companies collectively raised $6.7 billion in back-to-back initial public offerings last week, capping a record year for IPOs. Massive demand for the firms' shares fueled massive gains in their first days of trading, but analysts covering the companies are growing concerned that the stocks climbed above rational trading levels.

Gordon Haskett changed its rating for Airbnb to "underperform" from "buy" on Monday, eschewing the bullish outlook he held for the firm just one week ago. The home-sharing company's valuation is "more than stretched" after more than doubling in its Thursday debut, the firm said. Airbnb also trades at two times its estimated gross bookings value, where the average online travel group trades at a 0.6 multiplier, Gordon Haskett said.

The firm lifted its price target to $103 from $77, but the level still implies a roughly 20% drop from current levels.

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Separately, DA Davidson downgraded DoorDash to "neutral" from "buy" following the firm's 86% opening rally. The firm still feels DoorDash deserves to trade at a premium multiple due to its leadership in the food-delivery sector but noted its stock price leaves little room for error.

DA Davidson boosted its price target for DoorDash to $150 from $93. That level implies a slight drop from the stock's current price. No other analysts have initiated ratings on DoorDash shares.

Despite the shift in analyst sentiments and Monday losses, both companies still trade well above their IPO prices. Their rallies have fueled new scrutiny of market optimism, with some strategists concerned that the outsized demand for new issuances is a symptom of dot-com-era greed.

DoorDash traded at $157.51 as of 3:10 p.m. ET Monday. Airbnb traded at $129.33.

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