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On Wednesday, BMO Capital Markets adjusted its financial outlook for DoorDash Inc. (NASDAQ: NASDAQ:DASH), reducing the price target slightly from $240.00 to $238.00, while reaffirming its Outperform rating on the stock. The revision follows DoorDash’s announcement of two significant acquisitions, which are expected to enhance the company’s market presence and capabilities. According to InvestingPro data, DoorDash has demonstrated strong momentum with a 64.51% return over the past year, maintaining a robust market capitalization of $75.84 billion.
DoorDash revealed it has agreed to purchase Deliveroo (OTC:DROOF) for approximately £2.9 billion, a valuation of 17 times Deliveroo’s projected 2024 EBITDA. This strategic move is anticipated to provide DoorDash with substantial scale opportunities in Europe and the Middle East. Additionally, DoorDash is set to acquire SevenRooms for $1.2 billion, at a multiple of 12 to 16 times its revenue. SevenRooms’ platform is designed to offer a wider range of merchants access to advanced consumer intelligence tools. The acquisitions align with DoorDash’s strong financial position, as InvestingPro data shows the company holds more cash than debt and maintains a healthy current ratio of 1.72.
BMO Capital’s analyst praised the acquisition of Deliveroo, highlighting the significant scale opportunities it presents. The analyst’s projections for DoorDash’s revenue and EBITDA for the years 2025 and 2026 remain largely unchanged. However, the first quarter of 2025’s take-rate initiatives and the ongoing assessment of the integration of the acquisitions, as well as macroeconomic trends, have been factored into the updated model.
The analyst’s comment sheds light on the rationale behind the maintained Outperform rating, despite the minor adjustment in the price target. "We applaud the Deliveroo acquisition, given the significant scale opportunities," the analyst stated. They further noted that the current estimations for DoorDash’s financial performance in the coming years are stable, with the recent strategic moves being incorporated into their valuation model. With trailing twelve-month revenue of $11.24 billion and an EBITDA of $538 million, DoorDash demonstrates substantial operational scale. For deeper insights into DoorDash’s valuation and growth metrics, investors can access comprehensive analysis through InvestingPro, which offers exclusive access to over 30 key financial metrics and expert-curated ProTips.
DoorDash’s dual acquisitions mark a notable expansion of its business, with Deliveroo set to bolster its international footprint and SevenRooms poised to enhance its service offerings to merchants. The company’s strategic decisions are being closely monitored by analysts as DoorDash continues to navigate the competitive landscape of food delivery and related technology services.
In other recent news, DoorDash Inc. reported its first-quarter results, showcasing a Gross Order Volume (GOV) and adjusted EBITDA that slightly exceeded expectations, with EBITDA reaching $590 million. Analysts from Cantor Fitzgerald highlighted that DoorDash’s GOV and EBITDA surpassed Street estimates by 1%, projecting a stable growth rate for the second quarter. RBC Capital Markets maintained an Outperform rating, noting solid order growth and the potential for increasing profitability. Despite a slight decline in the take rate, DA Davidson observed that DoorDash’s proactive strategies are enhancing affordability while maintaining competitiveness. Benchmark analysts raised DoorDash’s price target to $225, reflecting a modest increase in expected forward profitability. Truist Securities adjusted its price target to $230, maintaining a Buy rating, and emphasized DoorDash’s momentum across all business segments. The company’s recent acquisitions, including Deliveroo and SevenRooms, are expected to expand its geographical footprint and enhance platform capabilities. These developments indicate DoorDash’s strategic focus on growth and market expansion amidst a competitive landscape.
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