DoorDash stock gains momentum as grocery and international orders rise Investing.com
On Thursday, Oppenheimer revised its outlook on DoorDash Inc. (NASDAQ: NASDAQ: ), raised its price target to $180 from the previous $165, while maintaining an Outperform rating on the stock. The company’s decision is based on various factors including a strong delivery sector, as well as the company’s market performance, international expansion, and grocery segments, all of which contributed to stronger than expected order growth.
According to the analyst, DoorDash’s recent results and guidance met the highest expectations of investors. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) outperformed Oppenheimer and Street forecasts by 6% and 4% respectively, primarily driven by advertising revenue, lower administrative costs, and increased efficiency .
The analyst also highlighted the positive impact of DoorDash’s grocery delivery services. The analysis suggests that existing users are more likely to choose DoorDash for grocery delivery compared to other grocery-focused platforms. This may indicate DoorDash’s competitive advantage in the grocery delivery space.
In addition, DoorDash announced a new partnership with it Lyft (NASDAQ:), which is expected to boost the growth of its subscription service, DashPass. The partnership will provide discounted Lyft rides and free upgrades to DashPass members, as well as giving Lyft members three free months of DashPass.
Looking ahead, Oppenheimer raised its 2025 and 2026 Gross Order Value (GOV) estimates for DoorDash by 3% and 5%, respectively. However, the company has taken into account higher marketing and operating costs for 2025, resulting in EBITDA projections remaining unchanged, with a slight increase of 2% in 2026. The new target price of $180 is based on a multiple of 20x projected 2026 EBITDA. , which represents a 23% premium to Airbnb, reflecting DoorDash’s nearly triple-quick growth rate.
In other recent news, DoorDash Inc. reported significant growth and operational success in its Q3 2024 results. The company showed 19% growth in Gross Order Value (GOV), driven by the success of both its restaurant and grocery sectors. This growth was further fueled by the acquisition of Tazz by Wolt, as part of DoorDash’s targeted M&A strategy to increase its market share in Europe.
The company’s international business is now very rewarding, showing improved contribution margins similar to those of US Partnerships and Wegmans and plans to acquire major grocers to strengthen the grocery delivery segment. The pool of new shoppers, including first-time grocery customers, reflects DoorDash’s broad market appeal.
In addition, strategic partnerships with Lyft and streaming services enhance the DashPass membership program. The company’s revenue growth outpaced GOV’s growth, driven by Dasher’s advertising and operating expenses. DoorDash expects to maintain this trend of revenue growth exceeding GOV growth, focusing on increasing overall profit dollars.
Despite these positive developments, DoorDash expects product development to continue at a slower pace than in previous years. However, the company remains committed to driving future growth through DashMart’s national service and partnering with retailers. These are the latest developments, demonstrating DoorDash’s continued commitment to growth and efficiency.
InvestingPro Insights
To complement Oppenheimer’s positive outlook on DoorDash, recent data from InvestingPro provides more context for investors. DoorDash’s market capitalization stands at an impressive $64.17 billion, reflecting the market’s confidence in the company’s growth trajectory. This is in line with the strong performance noted in the analyst report.
InvestingPro Tips highlights that DoorDash’s revenue is expected to grow this year, and analysts expect sales growth this year. These projections support Oppenheimer’s positive outlook on the company’s future prospects. In addition, DoorDash’s revenue growth of 25.02% over the past twelve months underscores its strong expansion, especially in areas such as grocery delivery and international markets as mentioned in the article.
It is worth noting that DoorDash has shown an impressive return on stock price of 107.14% over the past year, indicating strong investor confidence. This performance is in line with the company’s operational improvements and strategic plans discussed in the article, such as the new partnership with Lyft and the growth of DashPass.
For investors looking for a comprehensive analysis, InvestingPro offers 12 additional tips for DoorDash, providing a deeper understanding of the company’s financial health and market conditions.
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