DoorDash’s Slowing Orders & UBER Competition Trigger Downgrade By This Analyst

  • RBC Capital analyst Brad Erickson downgraded DoorDash Inc (NYSE: DASH) from Outperform to Sector Perform rating and lowered the price target from $70 to $60.
  • Though DoorDash’s execution & management are widely considered the class of the sector, as 2023 dawns, the analyst is uncomfortable with a potentially unfavorable risk/reward given likely hypersensitivity to order deceleration.
  • Erickson thinks the combination of evident slowing core order growth, limited EBITDA downside support, and Uber Technologies, Inc. (NYSE: UBER) competing better in Manhattan as a proxy has prompted him to downgrade the stock.
  • The analyst’s latest Manhattan restaurant checks using his proprietary indexed ranking system found noteworthy p/p improvement by Uber in terms of relative order volumes versus Just Eat Takeaway.Com N.V. (OTC: JTKWY) subsidiary Grubhub & DoorDash.
  • He thinks Uber’s loyalty plan & strong suburb awareness may be at least partial contributors and indicates Uber is on the brink of taking over the number one share from Grubhub in Manhattan.
  • Erickson thinks he could be wrong if the core U.S. restaurant marketplace reaccelerates back to mid to high-teens and if management cuts significant portions of loss-making efforts further driving more material upside to EBITDA estimates.
  • Price Action: DASH shares are trading lower by 2.56% at $55.66 on the last check Friday.

Latest Ratings for DASH

Feb 2022JMP SecuritiesMaintainsMarket Outperform
Feb 2022JP MorganMaintainsNeutral
Feb 2022NeedhamMaintainsBuy


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