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Investing.com - UBS lowered its price target on DoorDash Inc. (NASDAQ:DASH) to $241.00 from $316.00 on Thursday, while maintaining a Neutral rating on the food delivery company. The adjustment comes as DoorDash shares have taken a significant hit, declining 6.33% over the past week, though the stock still maintains a 40.3% gain over the past year.
The price target reduction follows DoorDash’s disclosure of plans to reinvest potential synergies from its Deliveroo acquisition rather than expanding margins. UBS noted that while the acquisition will expand gross order value, the company intends to reinvest in European food markets instead of delivering immediate margin improvements.
UBS also highlighted DoorDash’s announced incremental investments in product development initiatives, including DashMart, as well as a new global technology platform. These investments will result in a "consequentially lower" adjusted EBITDA profile over the next few years, according to the firm. Despite these near-term pressures, DoorDash continues to show strong revenue growth, with analysts forecasting 24% sales growth for the current year.
The investment bank cut its 2026 and 2027 adjusted EBITDA estimates by approximately 11% and 18% respectively, driving the $75 reduction in price target.
UBS maintained its Neutral rating on DoorDash, citing a "narrow risk/reward skew of 1.5x" for the stock. The company currently trades at a P/E ratio of 150.52, though its PEG ratio of 0.48 suggests it may be reasonably valued relative to its growth prospects. According to InvestingPro data, analyst price targets for DoorDash range from $205 to $360, with the current Fair Value assessment indicating the stock may be overvalued at its current price of $238. Investors seeking deeper insights can access the comprehensive Pro Research Report, available for DoorDash and 1,400+ other US equities.
In other recent news, DoorDash reported strong third-quarter earnings, surpassing top-line expectations and providing robust guidance for the fourth quarter. Despite this, the company’s announcement of significant investments in its technology platform for 2026 has prompted mixed reactions from analysts. Stifel lowered its price target slightly to $253, citing potential margin pressures following DoorDash’s acquisition of Deliveroo. Meanwhile, William Blair maintained an Outperform rating, highlighting the company’s plans to streamline operations across DoorDash, Deliveroo, and Wolt.
BTIG also kept a Buy rating and a $315 price target, despite market concerns over the investment focus. Citizens adjusted its price target to $285 from $335, maintaining a Market Outperform rating and noting the overshadowing effect of the investment plans on the positive earnings report. Similarly, Goldman Sachs lowered its price target to $279 but upheld a Buy rating, acknowledging DoorDash’s strategic execution and platform growth. These developments reflect the complex balance between DoorDash’s current financial performance and its future investment strategy.
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