On Wednesday, Citi maintained a Buy rating on DoorDash Inc. (NASDAQ: NASDAQ:DASH) stock and increased its price target to $211 from $155. The firm's analyst highlighted DoorDash's consistent improvements in quality and selection, as well as the efficiency of its marketplace. These factors are expected to sustain the company's order growth, particularly as it expands into new areas such as grocery delivery.
DoorDash has seen user growth and order frequency reach record levels in the third quarter, driven by the addition of new verticals like grocery services, which also contribute to an increase in the average order value (AOV). These trends are anticipated to persist into 2025, with the platform becoming more ingrained in users' habits as it continues to broaden its offerings.
According to the analyst, DoorDash's profitability and free cash flow (FCF) are on an upward trajectory, noting that the company achieved positive GAAP operating income in the third quarter. The firm's optimistic view is based on DoorDash's excellent execution and the presence of multiple avenues for sustained revenue and earnings growth.
Citi's revised price target of $211 reflects confidence in DoorDash's ability to continue attracting users and improving its financial fundamentals. The analyst expressed a belief that the company's strategic expansion into new verticals like grocery delivery will be a key driver of its success.
In other recent news, DoorDash has made significant strides in its earnings and revenue growth, as well as its strategic partnerships. Mizuho (NYSE:MFG) Securities has raised DoorDash's price target to $200, citing the company's potential for profit growth. This prediction comes after a detailed analysis of DoorDash's operating metrics, which suggests that Gross Order Value (GOV) growth will be a primary indicator for the company's profitability prospects.
Additionally, BofA Securities has increased its price target for DoorDash to $210, maintaining a Buy rating. The firm's analysis indicates that DoorDash's fundamental outlook for the upcoming year is robust, driven by stable demand trends in the company's core U.S. restaurant business.
Loop Capital has also adjusted its price target for DoorDash to $200, maintaining a Buy rating. The firm's forecast for the year 2026 played a role in this decision, taking into account the long-term earnings potential of DoorDash.
DA Davidson has increased its price target for DoorDash from $119.00 to $150.00, following the company's strong Q3 results and a new partnership with Lyft (NASDAQ:LYFT).
Finally, Oppenheimer has raised its price target for DoorDash to $180, highlighting the company's robust delivery sector, performance in the marketplace, international expansion, and grocery segments.
These recent developments underscore DoorDash's commitment to growth and operational efficiency.
InvestingPro Insights
DoorDash's strong market position and growth potential, as highlighted by Citi's analysis, are further supported by recent financial data and insights from InvestingPro. The company's revenue growth remains robust, with a 24.56% increase over the last twelve months as of Q3 2024, reaching $10.15 billion. This aligns with the InvestingPro Tip that analysts anticipate sales growth in the current year.
The company's financial health appears solid, with InvestingPro data showing that DoorDash holds more cash than debt on its balance sheet and its liquid assets exceed short-term obligations. This strong financial position provides DoorDash with the flexibility to continue investing in growth initiatives, such as expanding into new verticals like grocery delivery.
Investor sentiment towards DoorDash has been notably positive, as evidenced by the stock's impressive 90.54% price return over the past year. The stock is currently trading near its 52-week high, with a price that is 98.74% of its highest point. This performance aligns with the InvestingPro Tip indicating a high return over the last year.
For investors seeking a more comprehensive analysis, InvestingPro offers 17 additional tips for DoorDash, providing a deeper understanding of the company's financial health and market position.
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