DoorDash: Balancing Growth and Profitability – A Hold Rating Review

Goldman Sachs analyst Eric Sheridan reiterated a Hold rating on DoorDash (DASH – Research Report) today and set a price target of $122.00.

Eric Sheridan has given his Hold rating due to a combination of factors relating to DoorDash’s performance and strategic choices. DoorDash outperformed expectations in quarterly gross order volume (GOV), thanks to higher than anticipated order volumes, reflecting continued growth in the food delivery and local commerce sectors. This growth is seen as a positive sign, as it suggests a broadening of the platform’s value proposition. However, DoorDash’s management has again reported adjusted EBITDA results and provided forward-looking statements that align with Goldman Sachs and general market predictions, showing consistency in financial performance.
Despite the positive unit economics and gross profit across most of its global business segments, DoorDash remains focused on growth investments, particularly in research and development, over immediate margin optimization. This strategic choice, aimed at capturing long-term opportunities in high-growth end markets, suggests a delay in operating leverage improvements. Consequently, the discussion among investors for the near future is expected to revolve around the company’s ability to balance growth in GOV and advancement in adjusted EBITDA margins. Sheridan’s reiteration of a Neutral rating, alongside a revised 12-month price target, reflects this cautious optimism and the ongoing debate on the company’s investment priorities against its financial progress.

Based on the recent corporate insider activity of 158 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DASH in relation to earlier this year.

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DoorDash (DASH) Company Description:

Founded in 2013, DoorDash Inc is a California-based company which provides on-demand food delivery services in the United States, Canada, and Australia through its local logistics platform.