Key Takeaways From Raymond James' Initiation On DoorDash

  • Raymond James analyst Aaron Kessler initiated coverage on DoorDash, Inc DASH with a Market Perform rating with no price target.
  • Kessler saw a large total addressable market for food delivery.
  • DoorDash has established itself as the leading food delivery platform in the U.S. with a 50% plus market share, Kessler noted.
  • DoorDash offered significant value for its three constituents, including merchants, consumers, and Dashers, observed Kessler.
  • Kessler expected ~15% long-term revenue growth through continued consumer delivery adoption and increased frequency of orders, further merchant expansion, expansion outside of the core restaurant category, and International expansion.
  • He believed DoorDash could achieve long-term EBITDA margins of 25%+ through scale efficiencies.
  • Additionally, he believed DoorDash could show more meaningful operating leverage as it reinvested for growth in its core business and adjacencies. 
  • He acknowledged that investors in this current environment have become more valuation sensitive and may seek more significant near-term margins and cash flow.
  • Price Action: DASH shares traded higher by 3.07% at $70.13 on the last check Monday.

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