Redburn Atlantic initiated coverage on DoorDash (NASDAQ:DASH) with a Buy rating, setting a year-end 2025 price target of $170, representing a potential 66% upside from its current price.
Analysts at Redburn Atlantic highlighted DoorDash's strong position in the market and its ability to deliver industry-leading growth and above-consensus earnings.
The firm notes that DoorDash, founded in 2013 and currently led by CEO Tony Xu, has grown to become the number one food delivery platform in the U.S. and expanded its reach to 31 international markets.
Analysts pointed out that DoorDash's "greatest freedom to invest and best track record for driving share gains" positions it well for growth. They forecast an 18% compound annual growth rate (CAGR) in gross transaction value (GTV) from FY23 to FY27, putting their FY26/27 GTV forecasts 10-15% ahead of consensus.
They also noted DoorDash's advantage in the U.S. market where "winner-takes-most dynamics" are playing out, favoring the company over competitors like Grubhub.
Despite some challenges, Redburn Atlantic is optimistic about DoorDash's ability to drive above-consensus adjusted EBITDA. They expect increasing delivery efficiencies, growing ad revenue, and leverage on fixed costs to contribute to a 3.2% adjusted EBITDA margin by FY27.
Redburn Atlantic also emphasized DoorDash's financial strength, stating that it has "the strongest balance sheet in the sector" which grants it significant flexibility to respond to market dynamics. This financial robustness, combined with operational flexibility, is viewed as a major advantage in the competitive food delivery industry.
"We believe DoorDash has the greatest freedom to respond to any situation that materialises (which should also act as a powerful disincentive when, for instance, Meituan is considering where to expand overseas)," wrote Redburn.
Overall, Redburn Atlantic believes that DoorDash's potential for growth, operational strength, and market position make it a compelling investment, meriting the new Buy rating and ambitious price target.