DoorDash Receives Buy Rating and $170 Price Target from Loop Capital

DoorDash Receives Buy Rating and $170 Price Target from Loop Capital

By
Alina Rossi
2 min read

DoorDash, a major player in U.S. restaurant delivery, has been given a Buy rating and $170 price target by Loop Capital due to its high growth rate and strong execution. With 65% of the U.S. market share, DoorDash is expanding into new retail categories and stands to benefit from the shift to digital channels. Despite some challenges with delivery fees and control over customer experience, DoorDash generated $50B in sales for merchants in 2023. Additionally, autonomous driving technology is expected to have a positive impact on the company's economic model. Despite a recent quarterly loss, analysts remain bullish on DoorDash, with many rating the stock as a Buy.

Key Takeaways

  • DoorDash holds 65% of the U.S. market and is rapidly expanding into grocery and other retail categories.
  • Merchants have seen a 23% increase in sales, reaching $50 billion in 2023 through DoorDash, despite the love-hate relationship with delivery services due to fees.
  • Autonomous driving technology is expected to have a significant positive impact on DoorDash, with the potential for delivery robots to transform the economic model.
  • DoorDash reported a loss of $0.39 per share in its most recent quarter, missing estimates for a loss of $0.14 per share, on $2.3 billion in sales.
  • Analysts generally rate DoorDash as a Buy, with potential for substantial growth indicated by Loop Capital's $170 price target, reflecting a 30% upside to the closing price.

Analysis

DoorDash's robust U.S. market dominance and expansion into new retail sectors are driving analysts' bullish buy rating, yet delivery fees and customer experience control remain challenges. While merchants benefit from increased sales, DoorDash's recent quarterly loss raises concerns. The incorporation of autonomous driving technology could reshape the economic model positively. In the short term, DoorDash's stock may experience volatility, but in the long term, its ambitious expansion plans indicate potential growth. Stakeholders, including DoorDash, merchants, and investors, will closely monitor the company's ability to address delivery challenges and capitalize on technological advancements for sustainable success.

Did You Know?

  • Autonomous driving technology: Autonomous driving technology refers to the development of vehicles that can operate without human intervention. In the context of DoorDash, the use of autonomous driving technology is expected to revolutionize the company's delivery operations, potentially leading to the deployment of delivery robots and transforming the economic model of the business.

  • Loop Capital's $170 price target: Loop Capital's $170 price target for DoorDash indicates their favorable outlook on the company's stock, as it reflects a 30% upside to the closing price. This target suggests that Loop Capital believes DoorDash has significant potential for growth and provides a target for prospective investors to consider.

  • DoorDash's market share and expansion into new retail categories: DoorDash's dominant position, with 65% of the U.S. market share, and its expansion into new retail categories such as grocery highlight the company's aggressive growth strategy and its aim to diversify beyond restaurant delivery. This expansion could have far-reaching implications for DoorDash's overall market presence and competitive positioning.

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