DoorDash stock price target raised to $320 from $315 at Benchmark

Investing.com - Benchmark raised its price target on DoorDash Inc. (NASDAQ:DASH) to $320 from $315 while maintaining a Buy rating ahead of the company’s third-quarter earnings report. The new target represents potential upside from the current price of $242.79, aligning with the bullish sentiment reflected in DoorDash’s impressive 53.94% return over the past year.

The food delivery company is scheduled to report its quarterly results on Wednesday, November 5, after market close. Benchmark expects DoorDash to report gross order value and adjusted EBITDA at the high end of guidance for the third quarter. InvestingPro data shows analysts anticipate continued growth, with FY2025 revenue forecast to increase by 24% and EPS projected at $5.27.

The firm’s optimism stems from steady-state U.S. restaurant same-store sales comparisons and outperformance in grocery and convenience volume according to Mercatus data. This aligns with DoorDash’s strong revenue performance, which reached $11.89 billion in the last twelve months with 23.78% growth.

Benchmark also highlighted potential benefits from DoorDash’s recent partnership with OpenAI, which could drive monthly active user growth and increase order frequency. The firm noted this partnership could create a network effect-driven advertising opportunity. DoorDash enters this partnership from a position of financial strength, with InvestingPro rating its overall financial health as "GOOD" with particularly strong growth and cash flow scores.

The analyst’s revised price target is based on a discounted cash flow model reflecting a reduced weighted average cost of capital (WACC). While DoorDash trades at a high P/E ratio of 150.52, its PEG ratio of 0.48 suggests it may be reasonably valued relative to its growth rate. According to InvestingPro’s Fair Value assessment, the stock appears overvalued at current levels. Investors can access DoorDash’s comprehensive Pro Research Report, along with 12+ additional ProTips and dozens more financial metrics, to make more informed decisions ahead of earnings.

In other recent news, DoorDash has completed its acquisition of Deliveroo, prompting several analysts to update their forecasts and ratings for the company. Goldman Sachs reinstated coverage with a Buy rating and set a price target of $315, incorporating the Deliveroo business into its model. Stifel, while maintaining a Hold rating, raised its price target to $255, awaiting further commentary on the acquisition’s impact. Barclays also reinstated coverage with an Equalweight rating and a $272 price target, noting DoorDash’s significant market outperformance this year. Meanwhile, Truist Securities increased its price target to $340, maintaining a Buy rating based on data indicating growth in U.S. gross order value. Despite these positive developments, DoorDash faced challenges from a short report by Culper Research. The report alleges that DoorDash has been onboarding unauthorized workers through a process that bypasses Social Security Number requirements. This claim suggests that unauthorized workers might be responsible for a significant portion of deliveries.

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