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Why DoorDash Is More Than A COVID Story, Still In Early Innings: 3 Analysts React To Q1 Earnings

By Chris Katje

Food delivery company DoorDash Inc (NYSE:DASH) reported quarterly earnings Thursday after the market close. Here’s what analysts had to say about the company’s latest earnings report.

The DoorDash Analysts: Morgan Stanley analyst Brian Nowak has an Equal Weight rating on DoorDash and a $100 price target.

Bank of America analyst Michael McGovern has a Buy rating and lowered the price target from $200 to $160.

Needham analyst Bernie McTernan has a Buy rating and lowered the price target from $160 to $140.

Related Link: Why DoorDash Shares Are Rising After Hours 

The DoorDash Takeaways: Nowak said he was impressed with the execution and unit economics for DoorDash in the food delivery sector. with new opportunities visible for long-term growth.

“We like this layer cake approach to multiyear EBITDA generation but remain EW; await better entry point,” Nowak said.

Nowak also highlighted a raised in guidance for the company.

“We think this stronger than expected topline was a result of share gains in the US market and strength in core US restaurant and DashPass.”

Nowak said DashPass has strong retention and could be leading to market share gains versus the competition. DashPass membership reached a new high in the quarter.

McGovern highlighted the acquisition of Wolt by DoorDash, which will take the food delivery company into new markets in Europe.

“We are layering our expectations for Wolt into our model for the first time, adding $4.4 billion to our model for GOV (gross order volume) in 2023. We assume that Wolt generate a similar take rate to core DoorDash and project an incremental $554 million in revenue from Wolt in 2023,” McGovern said.

The additional $554 million would represent 7% of DoorDash’s annual revenue.

DoorDash saw record order frequency in the first quarter, which was one of the key investment highlights for McTernan.

“DASH continues to prove they are more than a COVID beneficiary, and are still in the early innings of transforming $1.6 trillion of US consumer spend (and soon to include Europe),” McTernan said.

The analyst points to delivery gains during the pandemic sticking around along with new delivery categories of convenience stores and grocery increasing.

“Still early days in market opportunity, DASH is still in reinvestment mode.”

McTernan said the total addressable market size for DoorDash continues to grow.

DASH Price Action: DoorDash shares were down 1.54% at $72.02 at the close Friday, according to Benzinga Pro

Photo courtesy of DoorDash. 

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Dive Deeper:
Why DoorDash Shares Are Rising Today
DoorDash Inc (NYSE: DASH) shares are trading higher Friday morning after the company reported better-than-expected top-line results. 
Why DoorDash Shares Are Rising After Hours
DoorDash Inc (NYSE: DASH) shares are trading higher in Thursday's after-hours session after the company
Analysts Stay On Ebay Sidelines After Q1 Earnings: Here's Why
Auction and marketplace company eBay Inc (NASDAQ: EBAY) reported first-quarter earnings after market close Wednesday. Analysts reacted to the earnings…
'Pent-Up Demand Driving Strength': Airbnb Analysts React To Q1 Earnings Beat
Airbnb Inc (NASDAQ: ABNB) shares traded higher by 4.9% on Wednesday after the company reported big first-quarter earnings growth and…
One subscription that gives you access to news from hundreds of sites
5 AMD Analysts Weigh In On Blowout Q1 Earnings: Why 2 Reduced Price Targets
Advanced Micro Devices, Inc. (NASDAQ: AMD) reported first-quarter earnings after the bell on Tuesday.
4 Fastly Analysts Weigh In On Q1 Earnings As Stock Plunges: 'The Challenge Remains Gross Margins'
Although Fastly Inc (NYSE: FSLY) reported a sales beat for the first quarter, its losses were higher than Street expectations.
Get all your news in one place