It's time to buy DoorDash after a post-earnings sell-off, Morgan Stanley says
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Now’s a good time to gain exposure to DoorDash , according to Morgan Stanley. The stock has dropped more than 9% since the company’s earnings announcement on Feb. 15. Investors were concerned by DoorDash’s larger-than-expected loss per share, as well as whether the company can achieve its forward guidance. DASH 1M mountain DoorDash shares over the last month Despite the pullback, Morgan Stanley is confident in the company’s growth runway. Analyst Brian Nowak upgraded shares to overweight from equal weight. He also raised his price target to $145 from $135, which implies 26.4% upside from Wednesday’s close. “DASH’s micro-level execution (growth and profitability) within its highly-competitive verticals is what drives us to Overweight,” Nowak wrote in a Thursday note. “We view DASH’s post EPS pullback (down ~10%) as an attractive entry point, with the gap between DASH’s EV/FY2 EBITDA multiple and peers now the lowest in history and DASH trading at a near trough EV/ FY2 EBITDA multiple.” DoorDash is also expected to reach GAAP profitability in 2024, per Nowak. This could lead to more “shareholder interest, flows and multiple appreciation,” he added. The analyst also noted that, as part of a bull case for the company, its rising non-grocery retail business could add another $1.8 trillion of offline spending in the U.S. alone. Shares jumped nearly 5% Thursday during premarket trading. Year to date, the stock is up around 16%.
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