DoorDash stock has rallied more than 60% this year but analysts see more room to run. The San Francisco-based food and grocery delivery stock was gaining Wednesday following positive analyst coverage in recent days.
Guggenheim analyst Taylor Manley initiated coverage of DoorDash late Tuesday with a buy rating and price target of 330. Manley is positive on DoorDash's push to grow beyond restaurant delivery, comparing its expansion to the "everything store" nickname often applied to Amazon's operations.
"We believe the not-yet-profitable G&R (grocery and retail) business will improve in the years ahead, with management expecting the company to be the volume leader 'within the next year,'" Manley wrote. "We believe G&R investments reflect the company's long-term ambitions of becoming the local 'Everything Store.'"
Meanwhile, JPMorgan analyst Doug Anmuth reestablished coverage of DoorDash stock with an overweight, or buy, rating and price target of 325 in a client note Tuesday morning.
DoorDash delivers "industry-leading growth at scale with improving unit economics," Anmuth wrote.
Anmuth expects DoorDash can drive further growth from its recent acquisitions of U.K.-based delivery company Deliveroo and hospitality software firm SevenRooms. But the company will need to "reinvest profits aggressively to scale the business and gain market share," Anmuth wrote.
He sees DoorDash utilizing its strong position to grow its gross order value an average of 17% over the next five years.
"Overall, the local commerce delivery industry is consolidating around a few large, global players that have profit pools in some of the largest markets which can be used to improve overall customer value proposition and invest in other markets," Anmuth wrote.
The analyst report follows a "restriction" period where JPMorgan paused coverage of DoorDash stock. Prior to the restriction, Anmuth held a neutral trading and 175 price target for DoorDash.
DoorDash Stock Hovers Near Buy Zone
On the stock market today, DoorDash rose more than 2% to 276.35 in morning trades. Shares slipped 1% to close at 270.23 on Tuesday.
DoorDash is hovering near a 5% buy zone above a 269.06 buy point in a cup-with-handle pattern, according to IBD MarketSurge.
The company is scheduled to report third-quarter earnings results on Nov. 5.
DoorDash stock boasts a near-perfect 98 IBD Composite Rating, according to IBD Stock Checkup.
That score places DoorDash at the top of the 59-stock Retail-Internet industry group tracked by IBD, which has performed well this year. The group ranks 31st among 197 industry groups, based on six-month price performance. The overall group is up 26% year to date.
