DoorDash Set To Thrive In 2024: Analyst Highlights Growth In Delivery Services And Potential In Grocery Advertising

Mizuho Securities analyst James Lee raised the price target of DoorDash Inc DASH to $140 (from $120) with a reiterated Buy rating (Top Pick).

In 2024, the analyst projects moderated inflation and a tight labor market in the U.S. to support resilient consumer spending, with sectors such as advertising, e-commerce, and gig economy services witnessing share gain and margin expansion.

In China, the analyst looks for consumer spending to remain subdued despite having a record high savings rate due to ongoing real-estate issues and rising unemployment. 

For DASH, the analyst expects continued GOV growth and share gains from favorable unit economics of rational competition, higher labor supply, and increased network density. 

Also, Lee projects continued margin expansion from lower dasher/customer acquisition costs and disciplined fixed-cost spending. 

Consequently, the analyst expects EBITDA growth of 20% in FY24, led by share gains in both food and grocery delivery.

Also, the analyst writes that the optionality in grocery advertising is ‘very attractive’ and projects EBITDA growth of another 20% if the company reaches industry monetization levels. 

However, Lee says that consumer softness can lead to slower growth in food delivery and new investment categories, thus acting as headwinds. 

Also Read: DoorDash Expands Horizon with Global Ventures and Retail Initiatives

Price Action: DASH shares are trading lower by 1.73% at $102.22 on the last check Wednesday.