Benchmark has raised the price target on DoorDash Inc. (NASDAQ: NASDAQ:DASH) to $173.00 from $152.00, while keeping a Buy rating on the stock.
The firm's analyst cited a conservative stance on second-half and 2025 restaurant order growth, which is reflected in the company's total 2025 gross order value (GOV) being 2% below the consensus.
The updated forecast by Benchmark takes into account several factors, including an expected moderation in DoorDash's U.S. restaurant market share gains, a high bar for restaurant orders, and increased promotional activity from competitors in grocery delivery.
However, these are thought to be partially balanced by DoorDash's growing supply, as evidenced by a recent partnership expansion with Wegmans announced on October 8.
As DoorDash prepares to report its third-quarter earnings on Wednesday, October 30, after the market closes, analysts are looking for management's commentary on several key areas.
These include the potential for advertising to significantly contribute to the company's revenue take rate over the next twelve months, the growth cadence of new restaurant merchants versus the contribution of same-store sales, and details on customer acquisition returns across its various verticals in the face of rising competitive promotional pressures.
In other recent news, DoorDash has been making significant strides in expanding its services and partnerships. The company has extended its collaboration with Wegmans Food Markets to offer grocery delivery from all Maryland Wegmans locations and plans to expand further to Virginia, North Carolina, New Jersey, Delaware, and upstate New York. This move is part of DoorDash's rapidly growing grocery segment and aligns with Wegmans' commitment to convenient and healthy living.
Several financial firms have shown confidence in DoorDash's market position and growth prospects. Oppenheimer increased its price target for DoorDash to $160 based on positive consumer spending trends on delivery services.
KeyBanc upgraded DoorDash from Sector Weight to Overweight, setting a new price target of $177, citing the company's growth prospects in food and grocery delivery. BTIG also upgraded DoorDash shares from Neutral to Buy, setting a price target of $155, based on the company's near-term performance and under-appreciated longer-term growth drivers.
Raymond James initiated coverage on DoorDash with an Outperform rating, suggesting potential for profitability growth in the company's international and new market segments. The firm's analysis suggests that DoorDash will achieve profitability faster than anticipated, particularly in its high-growth international segments and new verticals.
InvestingPro Insights
DoorDash's recent performance aligns with Benchmark's optimistic outlook. According to InvestingPro data, the company's revenue grew by 25.02% over the last twelve months, with a quarterly growth of 23.3% in Q2 2024. This robust growth supports the analyst's positive stance on the stock.
InvestingPro Tips highlight that DoorDash's net income is expected to grow this year, and analysts anticipate sales growth in the current year. These projections corroborate Benchmark's raised price target and Buy rating. Additionally, the company's strong financial position is evident from the fact that it holds more cash than debt on its balance sheet, providing flexibility for future growth initiatives.
It's worth noting that DoorDash's stock has shown a strong return over the last year, with a 97.5% price total return. This performance, coupled with the fact that the stock is trading near its 52-week high, suggests investor confidence in the company's prospects.
For readers interested in a deeper analysis, InvestingPro offers 10 additional tips for DoorDash, providing a comprehensive view of the company's financial health and market position.
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