DoorDash Stock: Wall Street's Bullish Bet Defies Market Underperformance
DoorDash (DASH), the $88.2 billion food and goods delivery platform, finds itself at a curious crossroads. While its stock has notably underperformed the broader market, Wall Street's analyst community remains steadfastly bullish on its long-term trajectory.
The numbers tell a story of divergence. Over the past 52 weeks, DASH shares have climbed 8.5%, a gain overshadowed by the S&P 500's ($SPX) 14.3% surge. Year-to-date, the stock is down 9.7%, contrasting with the index's positive return. This underperformance extends to its sector; the Amplify Online Retail ETF (IBUY) has also fared better over the same periods.
The recent volatility stems from DoorDash's mixed third-quarter report in early November. A 27.3% year-over-year revenue jump to $3.4 billion, fueled by strong order growth, beat expectations. Yet, an earnings per share (EPS) miss triggered a sharp 17.5% single-day sell-off, highlighting investor sensitivity in a competitive, margin-conscious landscape.
Despite this, the analyst outlook is strikingly optimistic. The consensus rating among 42 covering analysts is a "Strong Buy," with 30 endorsing that top-tier call. The mean price target of $276.92 implies a 35% upside from current levels, with a street-high target of $360 suggesting a 76% potential gain. This configuration has grown more bullish over the past month.
"The market is myopically focused on near-term profitability metrics," says Michael Torres, a portfolio manager at Horizon Growth Advisors. "DoorDash is executing on the top line and expanding its total addressable market beyond restaurants. The platform's logistics moat is deepening, and the current price presents a compelling entry point for patient capital."
Others are more skeptical. Sarah Chen, an independent market analyst, offers a sharper critique: "This is classic analyst groupthink. The company misses earnings, the stock tanks, and the chorus immediately shouts 'buy the dip' without any fundamental change. They're valuing a delivery app like a hyper-growth tech stock, ignoring the brutal unit economics, regulatory risks around contractors, and the sheer fickleness of consumer loyalty in this space. The 'strong buy' ratings feel more like a hope than a strategy."
Looking ahead, analysts project a dramatic 662% year-over-year EPS increase for the full fiscal year, a forecast that underscores high expectations for margin improvement. The company's ability to meet these elevated targets while navigating labor costs and competitive pressures will likely determine whether Wall Street's bullish faith is ultimately rewarded.
On the date of publication, the author had no position in any security mentioned. This article is for informational purposes only. Adapted from an original report.