DoorDash Stock Downgraded as Analysts Adjust Ratings

DoorDash (NASDAQ: DASH) has experienced a shift in analyst sentiment with a recent downgrade from a “strong-buy” rating to a “hold” rating by Zacks Research, according to a report published on November 6, 2023. This adjustment reflects a growing caution among analysts regarding the company’s performance amidst changing market dynamics.

Several other financial institutions have also provided insights into DoorDash’s stock. On October 15, 2023, Guggenheim upgraded its rating to “strong-buy,” indicating a more optimistic outlook. Conversely, Wedbush lowered its price target from $280.00 to $260.00 while maintaining a “neutral” rating. JMP Securities has taken a more bullish stance, raising its price target from $250.00 to $335.00 with a “market outperform” rating.

On the same day as Wedbush’s review, BTIG Research reaffirmed a “buy” rating with a price objective of $315.00. Stifel Nicolaus also adjusted its forecast, slightly lowering its price target from $255.00 to $253.00 while maintaining a “hold” rating. Overall, analysts have provided a mixed outlook, with two rating the stock as “strong buy,” twenty-three as “buy,” and twelve issuing a “hold” rating. Current averages indicate a “Moderate Buy” rating, with a consensus price target of $279.74, according to MarketBeat.

Quarterly Earnings Results and Market Response

DoorDash reported its latest quarterly earnings on November 5, 2023. The company recorded earnings per share (EPS) of $0.55, falling short of analysts’ expectations of $0.68 by $0.13. Despite this earnings miss, DoorDash achieved revenue of $3.45 billion, surpassing the consensus estimate of $3.35 billion. Year-on-year, revenue increased by 27.3%, and the company also posted a return on equity of 9.97% with a net margin of 6.83%.

Looking ahead, analysts project that DoorDash will report an EPS of 2.22 for the current fiscal year.

Insider Transactions and Institutional Holdings

In related news, insider transactions have also caught the attention of investors. On November 3, 2023, Director Stanley Tang sold 45,410 shares at an average price of $244.39, totaling approximately $11.1 million. This sale was filed with the Securities and Exchange Commission (SEC). Similarly, Chief Operating Officer Prabir Adarkar sold 24,968 shares on October 14, 2023, at an average price of $272.32, amounting to about $6.8 million. Following this transaction, Adarkar retained 909,579 shares valued at approximately $247.7 million.

Over the past ninety days, insiders have sold a total of 825,277 shares worth $205 million, with insiders owning 5.83% of the company’s stock.

Institutional investors have also made significant adjustments to their holdings. Vanguard Group Inc. increased its position by 3.7% during the third quarter, now owning 42,712,908 shares valued at approximately $11.6 billion. State Street Corp raised its stake by 3.1%, acquiring an additional 427,722 shares, bringing its total to 14,387,499 shares valued at $3.5 billion.

Geode Capital Management LLC and Invesco Ltd. also boosted their stakes in the company during the second quarter. Collectively, institutional investors hold approximately 90.64% of DoorDash’s stock.

DoorDash operates a platform that connects merchants, consumers, and independent contractors, both in the United States and internationally. The company runs DoorDash Marketplace and Wolt Marketplace, providing services that include customer acquisition, order fulfillment, and payment processing. As analysts reassess DoorDash’s potential, market observers will be closely watching the company’s performance in the coming quarters.