This post was originally published on this site
The revision reflects a more optimistic valuation of the company’s future earnings before interest, taxes, depreciation, and amortization (EBITDA).
The upgrade is based on a variety of factors, including the potential stabilization of profitability in DoorDash’s New Verticals and International segments.
RBC Capital also recognizes the company’s consistent order growth, which is seen as a result of increased frequency of orders. This trend is expected to continue, contributing to mid-to-high-teens growth over the next several years.
DoorDash’s strategic moves, particularly the possibility of forming partnerships, are also highlighted as a positive development. A notable example is the potential collaboration with Lyft (NASDAQ:LYFT), which could lead to a significant increase in orders and enhance DoorDash’s loyalty program, making it more competitive with Uber (NYSE:UBER)’s offerings.
While acknowledging that risks such as consumer spending behavior and the slower expansion into non-restaurant verticals exist, RBC Capital views these concerns as having a low probability of materializing. The firm anticipates upward revisions to DoorDash’s estimates in the future, suggesting confidence in the company’s growth trajectory.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
