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On Wednesday, Benchmark analysts increased the price target for DoorDash Inc. (NASDAQ:DASH) shares, raising it to $245.00 from the previous $220.00, while reiterating a Buy rating on the stock. Currently trading at $199.50 with a market capitalization of $82.6 billion, DoorDash maintains a "GOOD" overall financial health score according to InvestingPro analysis. The analysts noted DoorDash’s consistent performance, highlighting the company’s growth in Gross Order Volume (GOV) and order numbers, as well as guidance for the first quarter. They pointed out the significant quarter-over-quarter and year-over-year gross profit improvements, with international markets expected to reach gross profit breakeven by the third quarter of 2024 and the grocery segment nearing breakeven.[Get access to 14 additional InvestingPro Tips and comprehensive financial analysis for DoorDash through InvestingPro]
The contribution of marketplace advertising to DoorDash’s profit was acknowledged, although the analysts indicated that the impact of U.S. restaurant contribution profit excluding advertising on near-term margins was not entirely clear. With impressive revenue growth of 24.56% and a robust gross profit margin of 48.78%, DoorDash’s success in securing 21 of the top 25 U.S. based Consumer Packaged Goods (CPG) advertisers to promote on its U.S. marketplace in the fourth quarter was seen as a positive step in solving part of the advertising equation. The next phase for the company involves enhancing its advertising platform and targeting capabilities to maximize returns, though the timeline for these improvements is yet to be determined.
DoorDash’s international strategy was also a subject of praise, with a 25% year-over-year increase in merchant selection contributing to a significant rise in customers outside the United States (OUS) using the Marketplace in 2024 compared to previous years. This expansion has led to increased order frequency. The analysts remarked that several countries internationally have a higher penetration of new vertical and grocery users than the U.S., suggesting a potentially quicker global adoption pace for these new verticals. The stock’s strong momentum is reflected in its 63% return over the past year, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.
In other recent news, DoorDash has been the subject of several price target revisions following its fourth-quarter results. Piper Sandler, KeyBanc Capital Markets, Cantor Fitzgerald, Mizuho (NYSE:MFG) Securities, and Raymond (NSE:RYMD) James have all raised their price targets for the company, reflecting a positive outlook on its recent performance and future prospects.
Piper Sandler increased its price target to $210, citing DoorDash’s strong bookings and a new $5 billion stock buyback program. Meanwhile, KeyBanc raised its target to $240, attributing the adjustment to DoorDash’s strong fourth-quarter results and promising future guidance.
Cantor Fitzgerald’s analyst updated the price target to $230, noting DoorDash’s growth in Gross Order Value (GOV) and upward trajectory in profit margins. Mizuho Securities raised its target to $222, highlighting DoorDash’s strong GOV execution and potential operating leverage. Lastly, Raymond James increased its target to $215, citing the company’s successful beat and impressive execution.
These recent developments underscore the analysts’ confidence in DoorDash’s ability to maintain a healthy growth trajectory and its potential for sustained growth in the evolving market landscape. However, it’s important to note that these projections are based on the analysts’ assessments and should not be considered as guarantees of future performance.
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