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On Wednesday, Piper Sandler adjusted its price target for DoorDash Inc. (NASDAQ:DASH) shares, increasing it to $210 from the previous target of $160. The firm sustained a Neutral rating on the stock. Currently trading at $197.43, near its 52-week high of $199.17, DoorDash shares have delivered an impressive 63% return over the past year. The revision followed DoorDash’s release of its fourth-quarter 2024 results, which led to an approximate 6% rise in the company’s shares during after-hours trading, building on its strong year-to-date performance of 15.11%.
The analyst at Piper Sandler, Thomas Champion, acknowledged the company’s robust bookings and the newly announced approximately $5 billion stock buyback program as indicators of the company’s confidence looking into 2025. Champion highlighted DoorDash’s execution prowess and management’s commitment to expanding into new verticals such as grocery and retail. The company’s strong performance is reflected in its impressive revenue growth of 24.56% and gross profit margin of 48.78%. Additionally, the analyst pointed out that customer frequency had reached record levels and remained a key focus for the company’s management team. According to InvestingPro, DoorDash maintains a strong financial health score, with liquid assets exceeding short-term obligations.
Champion’s commentary also touched on the positive feedback regarding customer cohorts and the expansion into new business areas. However, he noted that despite the positive developments, DoorDash’s current valuation was still considered high, with the company trading at elevated revenue and EBITDA multiples. In light of the recent financial results and strategic initiatives, Piper Sandler made slight upward adjustments to its estimates for DoorDash. InvestingPro analysis suggests the stock is currently overvalued, with 12 additional key insights available to subscribers.
The fourth quarter of 2024 was particularly strong for DoorDash, with results and guidance surpassing expectations. This performance, along with the announcement of the significant buyback program, has been taken as a sign of the company’s solid position and its potential for sustained growth in the evolving market landscape.
DoorDash’s focus on newer verticals, alongside maintaining high user engagement levels, is part of its strategy to diversify its offerings and strengthen its market share. The company’s management has been actively pursuing opportunities to enhance the customer experience and drive growth, even as analysts continue to monitor the balance between performance and valuation.
In other recent news, DoorDash Inc. has been the subject of several analyst reports. KeyBanc Capital Markets analyst Justin Patterson maintained a positive outlook, raising the company’s price target to $240 from the previous $225. This comes following DoorDash’s strong fourth-quarter results and future guidance, which highlight potential in the local commerce sector. Cantor Fitzgerald analyst Deepak Mathivanan also increased the DoorDash price target, to $230 from $200, following a growth in Gross Order Value (GOV) of 21%.
Mizuho (NYSE:MFG) Securities expressed confidence in DoorDash by increasing the company’s price target to $222 from the previous $200, while Raymond (NSE:RYMD) James increased the price target to $215 from the previous $170. Both adjustments were made in response to DoorDash’s robust financial quarter. Lastly, BofA Securities analyst Michael McGovern raised the price target on DoorDash shares to $245, up from the previous $205, following the company’s financial performance which reported GOV, revenue, and EBITDA figures largely in line or above expectations. These are recent developments in the company’s performance and market outlook.
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