DASH: Integration Of Deliveroo Will Drive Geographic Expansion And Long-Term Opportunity

DoorDash’s analyst price target has increased modestly to $302.53, as analysts point to stronger revenue growth expectations from the integration of Deliveroo and continued momentum in the core delivery business. This is partially offset by a slight decrease in projected profit margins.

Analyst Commentary

Analyst perspectives on DoorDash remain divided, reflecting the company's complex outlook amid growth opportunities and competitive industry dynamics. Below, we summarize the most prominent themes from recent Street commentary.

• Bullish analysts are increasingly positive on the growth prospects tied to the integration of Deliveroo, with expectations that this acquisition will contribute to accelerating gross order value and geographic expansion.
• Several firms are raising price targets based on strong execution in the core U.S. delivery business and sustained momentum in new verticals, with growing average order values and improving unit economics.
• Channel checks and third-party data indicate that DoorDash's operational momentum is currently outpacing the broader delivery market, which is supporting upward adjustments to near- and long-term valuations.
• Improved marketing efficiency and product enhancements, such as the adoption of features that enable larger grocery and convenience baskets, are viewed as catalysts for higher revenue growth and greater profitability over the next several quarters.

• Bearish analysts point to pressures on profit margins, noting that increased investments in acquired units and technology may temper near-term earnings growth.
• Valuation concerns have been raised, with some stating that much of the upside narrative is already reflected in share prices following outperformance in the year-to-date period.
• Risks related to scaling new initiatives, such as autonomous delivery pilots, are highlighted, especially if cost structures do not materially improve to support profitable expansion.
• Intensifying competition from both established peers and large retailers expanding into grocery delivery could challenge DoorDash's ability to sustain elevated growth rates and margin expansion over the longer term.

What's in the News

• DoorDash issues a statement refuting Culper Research's short report, calling it "demonstrably false" after the firm alleged extensive use of unauthorized contract workers. Culper Research estimates these workers account for 26% to 57% of all deliveries (Bloomberg).
• Truist raises DoorDash's price target to $340, citing management's strong execution, growing U.S. order value, and momentum in both restaurant and new non-restaurant verticals ahead of Q3 earnings (Bloomberg).
• DoorDash is leasing a warehouse in San Francisco to test autonomous flying drone deliveries as part of its efforts to advance autonomous delivery technology in the U.S. (San Francisco Chronicle).
• Culper Research publicly announces a short position in DoorDash amid controversy over worker vetting practices (Bloomberg).
• DoorDash remains up 1% to $254.98 in morning trading following these developments (Bloomberg).

Valuation Changes

• Consensus Analyst Price Target has risen slightly from $300.72 to $302.53, reflecting more optimistic market expectations.
• Discount Rate has decreased marginally from 8.33% to 8.31%, indicating a slightly lower perceived investment risk.
• Revenue Growth projection has increased from 20.17% to 23.67%, suggesting analysts expect stronger top-line expansion.
• Net Profit Margin has fallen significantly from 15.65% to 13.18%, which implies anticipated pressure on profitability.
• Future P/E has climbed from 54.92x to 60.16x, reflecting higher valuation multiples for expected earnings.