Entering New Markets
DoorDash Inc DASH has struck a partnership with Lowe’s Companies Inc LOW to spearhead its foray into the home improvement market.
Potential Monetization
Benchmark predicts that DoorDash’s entry into new retail sectors such as grocery and convenience is poised to materialize significantly over the next 12+ months.
Analyst’s Optimistic View
The DoorDash Analyst: Mark Zgutowicz has recently started coverage of DoorDash with an optimistic Buy rating and a target price of $165.
The Growth Thesis
The DoorDash Thesis: Impressed by its extensive reach, Zgutowicz believes that DoorDash’s expansion into fresh horizons could yield a more robust revenue and margin growth pace than what the current consensus estimates suggest.
Competitive Landscape
The gap between DoorDash and its “well-funded #2” competitor, Uber Technologies Inc UBER Uber Eats, has been widening. Since 2020, DoorDash has securely maintained a “3x relative share position,” as highlighted by the analyst.
Strategic Advantages
According to Zgutowicz, DoorDash’s edge in network scale, sales and marketing efficiency, and cost optimization, coupled with a marked improvement in grocery profitability over the trailing twelve months, sets the stage for a promising growth trajectory in U.S. grocery Gross Order Value (GOV) and profitability in the near term.
Future Potential
Zgutowicz emphasized the untapped potential of Retail Media advertising for DoorDash, suggesting that it could be a key driver of conversion rates to non-restaurant Gross Order Value in the coming years.
Price Movement
DASH Price Action: As of Thursday’s publication, DoorDash’s stock had climbed by 0.59% to reach $139.60.
Image Credit
Image: Shutterstock
