DoorDash stock is down 35% over the past 12 months.
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At least three Wall Street analysts expressed reservations about DoorDash, rating shares neutral after mixed quarterly results from the food delivery company.
The online-food delivery company (ticker: DASH) posted a loss of $1.65 a share in the fourth quarter, wider than the 68-cent loss expected by analysts surveyed by FactSet. Revenue in the quarter grew 40% year over year to $1.8 billion, slightly above the consensus of $1.77 billion.
DoorDash
issued a stronger-than-expected profit forecast for the 2023 fiscal year, signaling the company’s expectation that customer spending will remain strong despite the higher price of food. The company expects earnings before interest, taxes, depreciation, and amortization to be between $500 million and $800 million, doubling from last year’s earnings of $361 million. The midpoint of their projection is higher than Wall Street’s estimate of $578.3 million.
Shares of DoorDash were trading nearly 7% lower at $62.29 in Friday trading. The stock has rallied 30% year to date and was initially up in after-hours trading on their quarterly results Thursday.
In commentary published after the results, multiple Wall Street analysts boosted their share price targets while advising investors to sit tight on the stock.
UBS analyst Lloyd Walmsley reiterated his Neutral rating on the stock and lifted his price target to $68 from $58. He’s encouraged by customer adoption of the platform, but said he has concerns about whether people will continue spending on food delivery amid layoffs.
RBC’s Brad Erickson also reiterated his Neutral equivalent rating on the shares and raised his price target to $75 from $60. Erickson, like Walmsley, worries about a slowdown likely triggered by a recession.
In the company’s quarter call, DoorDash CFO Prabir Adarkar said “there’s uncertainty around macro issues” such as the economy. He noted the company is confident in its fundamentals and includes that uncertainty in its outlook.
Mizuho analyst James Lee, who has a Neutral rating on shares and a $75 price target, said investors should wait for a better entry point since DoorDash is trading at a premium to its peers. Shares trade at an enterprise value-to-sales multiple of 4.7 times, more expensive than
Uber Technologies
(
UBER
) and
Lyft
(
LYFT
), which trade at about 2.08 times and 0.68 times, respectively, according to FactSet.
Still, other analysts are pounding the table on shares. Truist Youssef Squali reiterated his Buy rating and raised his price target to $102 from $101, citing the company’s “maniacal focus on execution.” Needham’s Bernie McTernan also reiterated his bullish rating.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com
Credit: marketwatch.com