Mizuho raised its price target for DoorDash (NASDAQ:DASH) to $162 from $152 per share in a note Friday, with the firm maintaining a Buy rating on the stock.
The increased price target follows a metrics deep dive by the firm, which said investments lead to EBITDA upside. Mizuho also maintained DASH as a top pick in the gig and travel space.
"After looking through DASH's key operating metrics, we feel incrementally confident about our FY24 EBITDA forecast, 10% above consensus," wrote the firm.
"Although EBITDA would be back-end loaded, the company has put together the building blocks for grocery delivery, international, and membership acquisitions to drive 2H24 demand," they added.
Furthermore, the firm said that given DASH's strong track record of execution, they believe consensus FY24E EBITDA is conservative as it assumes declining incremental margins while our forecast is more reasonable at flattish margins year-on-year.
"Furthermore, grocery advertising is an attractive call option with potential to generate incremental upside of 20% in EBITDA," concluded Mizuho.