Airbnb, Inc.

ABNB Details

Airbnb, Inc. (NASDAQ: ABNB) operates a platform for stays and experiences to guests worldwide and connects hosts and guests online or through mobile devices to book spaces and experiences. Its listings include private rooms, entire homes, luxury villas, treehouses, castles, and other experiences. The company partners with hosts throughout the listing process and provides them with a suite of tools to manage the listings, including scheduling, merchandising, integrated payments, community support, host protections, pricing recommendations, and feedback from reviews. The platform for guests enables customizable wish lists, in-application guest-to-host messaging, and a way to leave reviews.

Robust Q2FY21 Results: The company reported a 298.84% growth in net revenue to USD 1.34 billion in Q2FY21 (ended June 30, 2021) compared to USD 334.77 million in Q2FY20, due to a significant rebound in nights booked combined with higher average daily rates. Net loss for Q2FY21 was USD 68.22 million vs. USD 575.59 million in Q2FY20. As of June 30, 2021, the company had a cash balance (including marketable securities) of USD 7.43 billion and total debt of USD 1.98 billion. ABNB booked 83.1 million nights and experiences in Q2FY21, up 197% from 28.0 million in Q2FY20.

Key Risks: With the imposition of lockdowns and travel restrictions relating to the outbreak of the COVID-19 pandemic, the hospitality industry (in which the company operates) witnessed a sharp decline in global commercial activity. If this declining trend continues, the company's financials may be adversely affected. Moreover, ~50% of the company's revenue in FY20 was in currencies other than USD, thus exposing it to currency fluctuations. Even with the foreign currency derivative contracts that reduce this risk, they do not eliminate the financial impact of movements in exchange rate entirely.

Outlook: In its Q2FY21 shareholder's letter, the company outlined that it expects to continue to witness the impact of COVID-19 and the spread of the new variants on the overall travel behavior. Despite the pandemic-related uncertainty, ABNB anticipates generating record quarterly revenue and the highest adjusted EBITDA in Q3FY21.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

ABNB Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: ABNB's stock price has increased 4.53% in the past month and is currently at the mid-point of the 52-week range of USD 121.50 to USD 219.94. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is 57.74. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 186.99. Considering the slight uptick in the stock price, decent fundamentals, encouraging outlook, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 171.36, up 1.04% as of October 08, 2021, 12:48 PM ET.

* All forecasted figures and Industry Information have been taken from REFINITIV.

* The reference data in this report has been partly sourced from REFINITIV. 

Baker Hughes Company

BKR Details

Baker Hughes Company (NYSE: BKR) is an energy technology company that offers various products and services across the energy and industrial value chains. Its four operating segments are 1) Oilfield Services (OFS), 2) Oilfield Equipment (OFE), 3) Turbomachinery & Process Solutions (TPS), and 4) Digital Solutions (DS). It primarily offers its products and services in the upstream, midstream, and downstream areas of the oil & gas sector worldwide, with operations in over 120 countries.

Formation of HMH: On October 06, 2021, BKR's Subsea Drilling Systems division (SDS) and MHWirth AS, a wholly-owned subsidiary of Akastor ASA, finalized their merger to establish HMH, a new global offshore drilling equipment firm. The newly created firm is owned equally by Akastor and BKR. Under the terms of the merger agreement, BKR paid net cash consideration of approximately USD 78 million, representing the agreed payment to Akastor of USD 100 million minus transaction adjustments.

Deploying Enterprise AI Solutions: BKR and C3 AI, an Enterprise Artificial Intelligence (AI) application software business, announced on September 14, 2021, that their BHC3 Production Optimization enterprise AI program had been successfully deployed for MEG Energy, an Alberta-based energy company. The program will boost operational efficiency and productivity and enable MEG to perceive risks throughout its upstream production process.

H1FY21 Results: The company reported a slight decrease of 2.32% in total revenues to USD 9.92 billion during H1FY21 (ended June 30, 2021) compared to USD 10.16 billion during H1FY20, primarily driven by lower volumes in OFS and OFE segments. However, its net loss improved to USD 682 million during H1FY21 compared to USD 16.44 billion reported in H1FY20. As of June 30, 2021, its cash and cash equivalents (including investment security) were USD 4.46 billion, with a total debt of USD 6.77 billion.

Key Risks: BKR's manufacturing processes rely on having enough raw materials, components, and manufacturing capacity to achieve its production goals at a fair cost while keeping inventories to a minimum. Failure to manage its manufacturing process can influence the company's ability to meet its goals and revenue targets and prevent raw material shortages or oversupply.

Outlook: BKR indicated in its Q2FY21 earnings report that it anticipates its North American and international onshore activities to improve in H2FY21. It also expects offshore markets to normalize in FY21, and it remains bullish on the LNG and natural gas markets in the long run.

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

BKR Daily Technical Chart (Source: REFINITIV)

Stock Recommendation BKR's stock price shot up by 88.71% in the past twelve months and is currently trading at the higher band of the 52-week range of USD 12.74 to USD 26.57. The stock is currently trading above its 50 and 200 DMA levels, and its RSI Index is at 61.42. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 27.65. Considering the significant rise in the stock price in the past twelve months, robust balance sheet, significant free cash-flows, and current valuation, we recommend a "Hold" rating on the stock at the current price of USD 25.25, up 1.86% as of October 08, 2021, 10:37 AM ET.

*All forecasted figures and Industry Information have been taken from REFINITIV.

*The reference data in this report has been partly sourced from REFINITIV. 

Cara Therapeutics, Inc.

CARA Details

Cara Therapeutics, Inc. (NASDAQ: CARA) is a clinical-stage biopharmaceutical business focusing on developing and commercializing novel chemical entities that target peripheral kappa opioid receptors (KORs) to relieve pruritus. It uses a unique drug screening technology to create a pipeline of compounds with analgesic and anti-inflammatory effects. It is also developing a novel medication named KORSUVA (CR845/difelikefalin), a first-in-class KOR agonist that targets KORs in the peripheral nervous system and immune cells. CARA's three revenue streams are license and milestone payments, collaborative income, and clinical compound revenue.

Results for KARE Phase 2 Trial: CARA reported on October 4, 2021, that the KARE Phase 2 clinical study of oral KORSUVA (oral difelikefalin) for treating moderate-to-severe pruritus in mild-to-severe atopic dermatitis (AD) patients failed to achieve its primary objective in any of three dosages. However, the adverse events were mild or moderate in intensity, indicating that difelikefalin was well tolerated. The most common side effects were abdominal discomfort, nausea, dry mouth, headache, dizziness, and hypertension.

KORSUVA Receives FDA Approval: CARA and Vifor Pharma, a global pharmaceuticals company, announced on August 24, 2021, that the US Food and Drug Administration (FDA) approved KORSUVA injection in people undergoing hemodialysis for the treatment of modest pruritus associated with renal disease. As a result, CARA is now collaborating closely with Vifor Pharma to introduce and commercialize KORSUVA injectables in the United States in Q1FY22.

H1FY21 Results: The company reported a sharp decline of 85.90% in total revenues to USD 1.94 million during H1FY21 (ended June 30, 2021) compared to USD 13.73 million during H1FY20, as it does not generated any revenue in Q2FY21. Its net losses during H1FY21 increased slightly to USD 54.05 million from USD 53.99 million reported in H1FY20. As of June 30, 2021, CARA had cash and cash equivalents (including marketable securities) of USD 155.18 million and no outstanding debt.

Key Risks: CARA and Vifor Pharma have signed a license agreement to commercialize KORSUVA injections in the US, with a 60:40 profit-sharing arrangement. If they fail to sell the injections successfully or if a new cheaper medication for the same therapy enters the market, it will impact the company's financials state of affairs.

The process for receiving FDA approvals is time-consuming and subject to rigorous regulations. If the regulatory authorities do not grant the required approvals, CARA's results of operations could be compromised.

Outlook: As of August 09, 2021, CARA expects its existing unrestricted cash and cash equivalents and available-for-sale marketable securities to be sufficient to fund its planned operating expenses and capital expenditures into FY23.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

CARA Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: CARA's share price has declined 51.52% in the past six months and is currently leaning towards the lower band of the 52-week range of USD 11.22 to USD 29.65. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 41.70. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 15.08. Considering the significant correction in the stock price in the past six months, excellent balance sheet, commercialization efforts, current valuation, and associated risks, we recommend a "Hold" rating on the stock at the current price of USD 14.15, traded flat as of October 08, 2021, 1:07 PM ET.

*All forecasted figures and Industry Information have been taken from REFINITIV.

*The reference data in this report has been partly sourced from REFINITIV.