DoorDash Q3 Showed Strength Despite the Uncertain Macro

By Sam Boughedda

Oppenheimer analysts upgraded DoorDash Inc (NYSE:) to Outperform from Perform, establishing a price target of $70 per share in a note on Monday.

The analysts told investors that increased disclosure shows improving U.S. restaurant margins, and they’re now able to size international and U.S. non-restaurant losses.

“We forecast ’25 EBITDA of $1.5B, with GOV margins of 1.8%, up from 0.7% in ’22E. We forecast U.S. restaurant contribution margins improving from 5.7% in ’22E to 6.1% in ’25E, with Int’l. & U.S. non-restaurant contribution margins improving from -13.4% in ’22E to -2.4% in ’25E—based on 4–5% incremental margins,” wrote the analysts.

The analysts added that the company’s showed continued strength, despite the uncertain macro backdrop “with GOV 2% above Opco/Street and EBITDA $31M/$29M higher, with 4Q EBITDA guided $11M higher.”

“DASH disclosed U.S. Restaurant contribution profit of $595M in 3Q, +42% y/y and incremental margins have averaged 7% for the past eight quarters (higher YTD),” they added.

“Our price target assumes 15x FY25E EBITDA at a 12% discount rate or 0.4x ’23E GOV (in line with  and ) or 13x U.S. Restaurant EBITDA.”

DoorDash shares are up 1.5% at the time of writing.