Key Takeaways
- MoffettNathanson cut its DoorDash price target to $239 from $277 on Nov. 11 and kept its Buy rating, a target 34% above the current price.
- The stock is 25% below its August high after a year of heavy spending and a new deal giving Prime members free Uber Eats delivery.
- The firm likes DoorDash’s $17 billion Instacart deal, which management says can bring $500 million or more of yearly synergies net of investments.
- At $239, DoorDash would trade at 35x forward earnings, a bit above the 33x it averaged over the past year, which makes the target a fair ask.
DoorDash (DASH) has had a rough year. On Nov. 11, MoffettNathanson cut its price target to $239 from $277 and kept its Buy rating. That target is still 34% above today’s $177.71 share price.
The latest test was a deal with Uber (UBER) to give Prime members free Uber Eats delivery. Analyst Michael Morton’s answer is DoorDash’s $17 billion deal for Instacart (CART).
First the spending, then Amazon
The stock is down 13% over the past year and 25% below its late-August closing high. Spending came first: in the second quarter, adjusted EBITDA rose 40% to $914 million, but GAAP income from operations slipped to $156 million from $163 million.
Then on Nov. 5, Amazon (AMZN) started waiving the delivery fee for Prime members on Uber Eats restaurant orders of $25 or more placed on Amazon, and DoorDash sank 13% that day.
DoorDash’s own third quarter set records, though. Revenue rose 34% to $4.6 billion (23% excluding Deliveroo), and net income rose 91% to $466 million.
Instacart is the firm’s answer
Morton says the stock is now in a “sweet spot,” and he likes the Instacart deal. DoorDash is paying $65 a share, at least 75% of it in cash. Management sees a path to $500 million or more of yearly synergies net of investments.
TIKR tracks 42 analysts on DoorDash. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on DoorDash, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See DoorDash’s Analyst Ratings
Does $239 add up?
Wall Street’s consensus target is $249, down from $277 a year ago, and Morton’s $239 sits a little below it.
Analysts expect normalized EPS to keep climbing, from $5.10 in 2025 to $9.91 in 2028.
(The 2027 estimate has slipped to $7.63 from $8.25 in late October, though.)
At the Nov. 10 close, DoorDash traded at 26x forward earnings, just above its five-year low of 25x on Oct. 29. Morton’s $239 works out to 35x the same earnings, a bit above the 33x the stock has averaged over the past year and well under its three-year average of 39x.
A fair ask, with Amazon as the catch
The risk is that Prime members take their restaurant orders to Uber Eats, and the Instacart deal still needs antitrust approval.
Still, I think $239 is a fair ask. Investors would only need to pay about what they paid on average over the past year, for a business that just posted record revenue and profit. Uber’s fourth-quarter report in early February should show how many Prime orders Uber Eats is winning, and a big number there would change my mind.
So what is DoorDash stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what DoorDash could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
