Needham Retains Conviction On DoorDash Despite Amazon's Collaboration With Rival Just Eat Takeaway.com

Needham analyst Bernie McTernan believes DoorDash, Inc DASH can leverage its leadership position in restaurant delivery to become one of the leading, horizontal, on-demand, last-mile fulfillment providers in North America.
He thinks DASH will be able to deliver all goods that consumers need within an hour, have an expiration date, and/or are produced by a local vendor.
The collaboration with Amazon Prime members having access to GrubHub+ for free for a year is a headline negative for DASH and Uber Technologies, Inc UBER.
At a minimum, this is another sign of a more aggressive third player (for at least a year) and, at maximum, a more realistic threat of competing against Amazon.com Inc AMZN in more delivery verticals.
The actual result on DASH and UBER will depend on how aggressive AMZN is in marketing the partnership. As of now, he did not see it on the Amazon homepage.
His view of Grubhub approaching AMZN from a position of weakness and Grubhub's expectation that the promo will be neutral to earnings and FCF likely points to a potentially more muted impact on DASH/UBER results.
However, this will likely be a key question for the companies as they head into 2Q earnings.
McTernan maintained DoorDash, Inc with a Buy rating and a price target of $100 (46% upside).
Price Action: DASH shares traded lower by 7.06% at $69.62 on the last check Wednesday. UBER shares traded lower by 2.95% at $21.86.

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