koto_feja
DoorDash (NYSE:DASH) jumped in early trading on Friday after a strong earnings report and buyback announcement delivered some new buyers to the stock. Analysts are buzzing over the report and the implications for 2023.
Needham reiterated a Buy rating on DoorDash (DASH) and increased its price target to $84 after digesting the numbers Analyst Bernie McTernan and team set higher adjusted EBITDA estimates following better than expected results and guidance. “Over the next two years we look for mid-teens GOV growth plus 70bps of annual margin expansion to drive adj. EBITDA to $1.3B, and we now value the stock at 25x our ’24 estimate,” noted McTernan.
Morgan Stanley was more cautious in its assessment of DASH. While improvements in logistic network efficiency and reductions in defect rates were noted to have driven consistent improvements in the contribution margin of the core business, with DASH expecting improvement in both US restaurant and investment area EBITDA margins in 2023, valuation is still seen as a concern. The firm’s price target of $67 implies slight downward action for shares.
Bank of America kept a Buy rating in place on DASH as it pointed to the earnings results and guidance that topped expectations. Crucially, the firm also noted that DoorDash (DASH) management seemed confident in the ability to manage incremental costs from the New York City delivery worker minimum wage, which was fully incorporated into EBITDA guidance. While NYC was noted to represent a low-single-digit percentage of bookings, multiple operational levers to absorb most of the incremental cost and higher fees in NYC could fully cover the difference.
Evercore ISI said DoorDash (DASH) still looks dashing as it reiterated an Outperform rating. “We are more constructive after tonight’s print as we see additional data points that point to a greater than expected resiliency in demand across DoorDash’s business,” said analyst Mark Mahaney. The firm trimmed its price target on DASH to $91.
Shares of DoorDash (DASH) rose 4.96% premarket to $70.21.
Read the DoorDash earnings call transcript.
