DoorDash Has ‘Considerable’ Room For Growth: This Analyst Changes Bearish Stance

Mar 15, 2024

DoorDash Inc (NASDAQ:DASH) recently launched AI-powered feature SafeChat+ to combat chat abuse and harassment.

Although delivery could be less “sticky” than mobility, especially amid a macro downturn, the execution by the company’s management has been “impressive,” according to Piper Sandler.

The DoorDash Analyst: Thomas Champion upgraded the rating for DoorDash from Underweight to Neutral, while raising the price target from $53 to $127.

The DoorDash Thesis: Being a dominant player in the U.S. food delivery market allowed the company to negotiate favorable terms with restaurants and expand their market share, Champion said in the upgrade note.

Check out other analyst stock ratings.

Consumers’ food delivery habits during COVID-19 have continued in the post-pandemic era, the analyst stated. “The on-demand delivery market is still expanding, with new categories like groceries and convenience store items being added,” he further wrote.

“We still see considerable room for growth in the core business,” Champion said. He added the U.S. restaurant delivery spend is around $85 billion, which seems large but is “dwarfed” by the $2 trillion spent on food and restaurants.

DASH Price Action: Shares of DoorDash had declined by 0.50% to $131.89 at the time of publication on Friday.

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