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Stock Analysis & Ideas

DoorDash Stock: Dashing Into a Bright Future

Post-pandemic hangover, you say? not at DoorDash (DASH). Any fears the Covid tailwinds would subside in a post-pandemic world appear unsubstantiated given the company’s latest quarterly report.

Investors evidently liked what the menu had to offer, sending shares higher in Thursday’s session even after the delivery-app company missed on the bottom-line; the company reported EPS of-$0.45, missing the Street’s call by $0.18.

However, that was offset by many positives. Revenue came in at $1.3 billion, a 34% year-over-year uptick and coming in ahead of the analysts’ forecast by $20 million.

There were also record numbers for quarterly total orders and gross order value (GOV). The latter reached $11.16 billion, beating the high-end of the guide by ~$460 million.

The good news is that for Q1, the company’s forecast calls for gross order value to come in between $11.4 billion to $11.8 billion, higher at the mid-point than Wall Street’s $11.4 billion estimate.

Mirroring investor sentiment, Truist’s top analyst, Youssef Squali, is impressed with the quarterly display and buoyant outlook.

“We believe the strong outperformance, in addition to the raised guidance, reflect both the stickiness of the food delivery consumer who is becoming habituated to the service (consumer retention improved and drove average order frequency to an all-time high in the quarter even as the economy is re-opening), and to a lesser degree management’s conservatism in the face of uncertainty,” the 5-star analyst commented.

With DashPass subscriptions now numbering 10 million, resulting in higher order frequency and profit per user, Squali believes the company “continues to make great strides growing selection across other categories and geos.”

Furthermore, with the $8.1 billion Wolt acquisition anticipated to close in 1H22, DASH will be propelled onto the global stage “at scale across 22 more countries, strengthening its competitive position and TAM.”

Squali, therefore, reiterated a Buy rating, although given higher investment assumptions, which include international expansion, convenience and grocery, DashMart and Drive, the analyst has lowered his price target from $260 to $230. Nevertheless, like so many stocks which have suffered at the hands of rotation, DASH stock has taken a beating recently, and despite the reduced target, there’s still upside of a whopping 139% from current levels. (To watch Squali’s track record, click here)

What do other analysts have to say about DoorDash? 11 Buys and 6 Holds add up to a Moderate Buy analyst consensus. DoorDash shares are priced at $173.14 and have an average price target of $173.14, suggesting ~80% one-year upside. (See DASH stock analysis on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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