On Thursday, BTIG upgraded DoorDash Inc. (NASDAQ:DASH) shares from Neutral to Buy, setting a price target of $155. The firm cited several reasons for the positive shift in rating, including ongoing near-term strength, under-appreciated longer-term drivers, and the expectation of positive EBIT and net income in the second half of the year.
DoorDash has demonstrated consistently strong execution and has been subject to steady upward pressure on estimates. BTIG's decision to upgrade comes at a time when the company is expected to hit significant financial milestones. The analyst noted that checks point to the company's ongoing near-term strength.
The firm also sees potential in what it describes as under-appreciated longer-term drivers for the company. These drivers have led BTIG to raise their estimates for DoorDash once again, signaling confidence in the company's future performance.
Moreover, BTIG highlighted DoorDash's position within a niche market, referring to rideshare-delivery as a "scarce pocket of secular growth in consumer-facing Internet." This sector, according to the firm, offers more growth potential compared to more mature categories like eTravel, online dating, and real estate services.
DoorDash's financial outlook is also looking positive, with important milestones anticipated in the latter half of the year. BTIG expects the company to achieve positive EBIT and net income in the second half, which contributed to the firm's decision to upgrade the stock rating.
In other recent news, DoorDash has been the focus of several analyst reviews following its strong second-quarter earnings report. Truist Securities reiterated its Buy rating on DoorDash, based on the company's user growth outpacing its competitors, effective execution, and ongoing investments in its marketplace. The firm also noted DoorDash's expanding portfolio of partnerships and improvement in fundamentals, such as an increase in users and order frequency.
BofA Securities maintained a Buy rating on DoorDash, discussing the company's resilience to restaurant industry challenges and the potential for increased margins. Cantor Fitzgerald initiated coverage on DoorDash with an Overweight rating, anticipating robust growth in gross order value and significant improvements in EBITDA margins.
Susquehanna raised the stock's price target to $140 following the company's favorable second-quarter performance, while Roth/MKM acknowledged DoorDash's recent earnings report that outperformed expectations.
These recent developments reflect the analysts' confidence in DoorDash's market position, user growth, and strategic partnerships, which are expected to continue bolstering the company's financial performance. However, it's essential to remember these are analyst expectations and not guarantees of future performance.
InvestingPro Insights
As DoorDash (NASDAQ:DASH) garners a favorable outlook from BTIG, InvestingPro data and tips provide additional context for investors considering the stock. Notably, DoorDash is holding more cash than debt, which is a positive sign for financial stability (InvestingPro Tip #0). This aligns with BTIG's positive sentiment regarding the company's financial prospects. Moreover, analysts are anticipating net income growth this year (InvestingPro Tip #1), reinforcing the expectation of positive EBIT and net income in the latter half of the year mentioned by BTIG.
InvestingPro data reveals a substantial market capitalization of $54.52B, indicating DoorDash's significant presence in the market. The company has experienced impressive revenue growth of 25.02% over the last twelve months as of Q2 2024, suggesting robust business performance (InvestingPro Data). Despite a negative P/E ratio of -131.69, which often signals investor caution, the company's strong revenue growth and gross profit margin of 48.17% highlight its potential for profitability (InvestingPro Data).
For investors looking for more depth, there are additional InvestingPro Tips available, including insights on analyst earnings revisions and the company's stock price volatility. These tips, along with the full suite of metrics, can be found at https://www.investing.com/pro/DASH.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.