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On Monday, Truist Securities expressed continued confidence in DoorDash Inc. (NASDAQ:DASH), maintaining a Buy rating and a price target of $235.00. The reaffirmation comes amidst news that Domino’s Pizza (NYSE:DPZ), a $15.7 billion market cap company with strong financial health according to InvestingPro, has extended its exclusive partnership with Uber Eats (NYSE:UBER) until May 1st. The extension is a shift from the previously anticipated expiration in March.
Domino’s management, during their earnings call, revealed plans to start negotiations with other third-party (3P) food aggregators and to initiate pilot testing with new partners in selected stores. With current annual revenue of $4.67 billion and a 4.4% growth rate, they recognized third-party aggregators as a potentially significant sales opportunity, which could contribute up to $1 billion. Notably, Domino’s acknowledged it has not yet partnered with DoorDash, the leading food delivery service in the United States. According to InvestingPro, Domino’s has maintained dividend payments for 13 consecutive years, demonstrating consistent financial stability.
Truist Securities sees the possibility of a partnership between DoorDash and Domino’s in the second half of 2025 as very likely, despite the extended agreement with Uber Eats. Analysts at Truist believe that if DoorDash can provide services to Domino’s, either through online ordering or drive-on-demand, it could significantly impact DoorDash’s business, given Domino’s extensive global presence.
Domino’s reported that its partnership with Uber Eats accounted for approximately 2.7% of its total revenue in the fourth quarter of 2024, equating to around $160 million or an annualized figure of $640 million. DoorDash’s leading position in the U.S. food delivery market, with over 50% market share, contrasts with Uber Eats’ more modest standing, according to the analysis from Truist Securities.
In other recent news, Domino’s Pizza Inc. reported its fourth-quarter earnings for 2024, which fell short of analyst expectations. The company posted an earnings per share (EPS) of $4.89, missing the forecasted $4.96, and revenue came in at $1.44 billion, below the anticipated $1.49 billion. Despite these challenges, Domino’s saw an 8% increase in operating income, reflecting some operational efficiencies. Analysts from various firms have noted the company’s performance, with some expressing concerns about the earnings miss. Additionally, Domino’s increased its dividend by 15% and repurchased approximately 259,000 shares for $112 million. Looking ahead, the company plans to open over 175 new stores in the U.S. in 2025 and anticipates a 3% growth in U.S. same-store sales. Domino’s is also focusing on expanding its presence on third-party delivery platforms, aiming for an additional $1 billion in revenue from these channels.
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