DoorDash stock target cut to $230 by BofA Securities

On Wednesday, BofA Securities updated its outlook on DoorDash Inc. (NASDAQ: NASDAQ:DASH), adjusting the price target to $230 from the previous $235 while maintaining a Buy rating on the company’s shares. The revision followed DoorDash’s recent financial performance, which indicated a modest slowdown in order growth but an increase in average basket size. According to InvestingPro data, DoorDash has demonstrated remarkable strength with a 64.5% return over the past year, while maintaining strong financial health with an overall rating of "GOOD."

DoorDash reported a Gross Order Value (GOV) of $23.1 billion and an EBITDA of $590 million, surpassing the Street’s expectations of $22.9 billion and $588 million, respectively. Despite the order growth decelerating by one percentage point to 18%, the company saw a year-over-year basket size growth of 2%. The company’s strong performance is reflected in its impressive 23.35% revenue growth and robust gross profit margin of 50.24%. InvestingPro analysis reveals 13 additional key insights about DoorDash’s financial position and growth prospects.

The Q1 GOV beat expectations by a narrower margin than usual, but the Q2 guidance was notably robust, ranging between $23.3 billion and $23.7 billion. This forecast exceeds the Street’s prior estimate of $23.2 billion. The management team cited strong order volumes and minimal impact from weaker segments of consumer spending in the U.S. The Q2 profit guidance is set at $600-650 million, which encompasses the Street’s previous estimate of $633 million, although the incremental margins are projected to be slightly lower at the midpoint (4.9% compared to the Street’s 5.7% prior estimate).

The analyst’s commentary highlighted that while the first quarter was less of a beat than usual, the second-quarter guidance exceeded expectations, which could help alleviate concerns regarding the broader economic environment. The updated figures suggest that DoorDash is navigating through potential macroeconomic challenges with a degree of resilience.

In other recent news, DoorDash Inc. reported its first-quarter 2025 earnings, exceeding expectations for earnings per share (EPS) with a result of $0.44, but falling short on revenue, which came in at $3.03 billion against a forecast of $3.10 billion. The company also announced two major acquisitions, Deliveroo (OTC:DROOF) for approximately $2.7 billion and SevenRooms for $1.2 billion, marking a strategic move to expand its presence in Western Europe and enhance its software solutions for merchants. Analysts from Citi and Evercore ISI maintained their optimistic outlooks, with price targets set at $240, citing DoorDash’s robust order growth and strategic initiatives. Meanwhile, Citizens JMP analysts held a $225 price target, acknowledging the company’s strong performance in the grocery sector and its resilience in challenging economic conditions.

DoorDash’s Gross Order Value (GOV) showed a 20% year-over-year increase to $23.1 billion, slightly surpassing projections, while its EBITDA of $590 million aligned with expectations. The company’s expansion into grocery delivery has seen significant traction, with a notable increase in monthly active users ordering from non-restaurant categories. Additionally, DoorDash launched delivery robots and expanded drone testing as part of its continued investment in autonomous delivery technologies. Despite a slight miss in revenue, analysts remain confident in DoorDash’s strategic direction, highlighting its acquisitions as relatively low-risk and poised to increase the company’s total addressable market.

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