KeyBanc raises DoorDash stock price target to $240

On Wednesday, KeyBanc Capital Markets maintained a positive outlook on DoorDash Inc. (NASDAQ:DASH), with analyst Justin Patterson raising the company’s price target to $240 from the previous $225, while keeping an Overweight rating on the stock. Patterson’s optimism stems from DoorDash’s strong fourth-quarter results and future guidance, which highlight the significant potential in the local commerce sector. The stock has demonstrated remarkable momentum, with a 63% return over the past year and currently trading near its 52-week high of $199.17. According to InvestingPro data, the company maintains a "Good" overall financial health score, with particularly strong marks in cash flow management.

DoorDash’s recent performance has been bolstered by robust key performance indicators (KPIs), suggesting that growth in the government order volume (GOV) is expected to continue without a clear end in sight. The company’s latest financial disclosures have provided evidence of enduring strength in the market, despite broader economic uncertainties.

Patterson’s analysis suggests that DoorDash is well-positioned to benefit from several factors that could drive growth in the high teens percentage-wise over the medium term. The company’s market strategy and operational efficiencies appear to be aligning to support this upward trajectory.

In response to the favorable outlook, KeyBanc has adjusted its estimates for DoorDash’s GOV and EBITDA for the years 2025 and 2026. The firm now projects that DoorDash’s EBITDA will grow at a compound annual growth rate (CAGR) of approximately 40% from 2024 to 2026. This robust growth expectation is a key driver behind the increased price target.

The new price target of $240 is based on a 26.3x multiple of the company’s projected 2026 enterprise value to EBITDA (EV/EBITDA). This valuation reflects confidence in DoorDash’s ability to sustain high growth and profitability over the coming years. KeyBanc’s Overweight rating indicates that they believe DoorDash’s stock will outperform the average return of the stocks the analyst covers over the next 12 to 18 months.

In other recent news, DoorDash has seen a series of price target upgrades from several analyst firms following robust financial performance. Cantor Fitzgerald raised the stock target to $230, citing a 21% growth in Gross Order Value (GOV) and an upward trajectory in profit margins. Concurrently, Mizuho (NYSE:MFG) Securities increased DoorDash’s price target to $222, emphasizing the company’s strong GOV execution and potential operating leverage.

Raymond (NSE:RYMD) James also upgraded the stock target to $215, noting DoorDash’s healthy user growth and profitability updates. BofA Securities lifted the price target to $245, acknowledging DoorDash’s consistent financial performance, which largely met or surpassed expectations. Lastly, JPMorgan raised the stock target to $205, reflecting confidence in the company’s growth and profitability potential.

These developments come in the wake of DoorDash’s recent financial results, which showcased strong fundamentals and a healthy demand environment. The company’s continued execution in expanding its services and significant potential for growth in user base and use case penetration have been highlighted by analysts. Despite increased investments impacting EBITDA in the fourth quarter, DoorDash expects EBITDA margins to improve sequentially in the upcoming quarters.

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