DoorDash is the IBD Stock of the Day as DASH stock is trading tightly near the key 21-day line following a recent rally. DoorDash stock has gained more than 100% this year.
On the stock market today, DASH stock slipped 0.5% to close at 100.21. Shares for the app-based delivery company broke out from a double-bottom base after DoorDash reported better-than-expected earnings in early November. Since then, DASH stock steadily climbed before taking a recent breather. Shares are sitting just above the stock's 21-day average price level.
Founded in Palo Alto, Calif., in 2013, DoorDash has expanded beyond its initial focus of delivering food to include groceries and some other retail items. The firm, which operates in 25 countries, competes with Uber and others for food delivery and Instacart for grocery and convenience items.
DoorDash went public in December 2020. Shares popped on it first day of trading on the New York Stock Exchange (DASH stock hopped over to the Nasdaq in September). Boosted by people ordering in during the Covid emergency, DASH stock surged in its first year of trading and hit a high of 257.25 in November 2021.
DASH Stock: Expectations For 2024
After big losses in 2022, DoorDash stock has been in recovery mode this year. DASH stock had gained 106% in 2023 entering trading Thursday. Shares, however, are still well off the November 2021 peak.
The food and grocery delivery company has tallied $6.3 billion in sales through the first nine months of the year, up 33% from the same period in 2022.
The rebound this year has won some bulls on Wall Street. Evercore ISI, for instance, recently named DASH stock among its top internet stock picks for 2024 in a Dec. 17 client note.
A big question for DoorDash is whether people will continue spending on food delivery if household budgets get tight.
However, Evercore analyst Mark Mahaney counters that a "macro trend of convenience" explains why DoorDash has not seen softness in demand despite evidence of broader weakness for discretionary spending.
Beyond that, "DASH continues to operate at a level that is as good as or, more likely, better than any other delivery company," Mahaney wrote in the December client note. Evercore has a 120 price target for DoorDash stock.
Buy Ratings From Wall Street
Still, about 54% of analysts following DoorDash are neutral on the stock, compared with 43% who hold buy ratings, according to FactSet.
Wedbush analyst Scott Devitt offered the neutral take in a client note Dec. 27.
"We hold a favorable view of the company's long-term domestic opportunity, supported by durable market-share leadership and rising margins in the core domestic restaurant business," Devitt wrote.
However, he said there is "significant execution risk" as the company pursues competitive grocery and retail categories.
Wedbush gave DASH a 12-month price target of 92, about 8% below its price as of the report's publication early Wednesday.
DoorDash Post-Earnings Surge
In earnings published Nov. 1, DoorDash reported a loss of 19 cents per share on sales of $2.2 billion for its third quarter ending Sept. 30. Analysts expected the food-delivery company to report a loss of 40 cents on sales of $2.09 billion.
"I think we saw a phenomenal quarter where, frankly, every line of business has accelerated in growth and improved in its unit economics," Chief Executive Tony Xu said on the company's earnings call.
DASH stock jumped 16% in trading the next day, to 87.79. Shares continued gaining through the month before pausing at around 100.
For the full year, analysts expect DoorDash to post a loss of $1.20 per share, according to FactSet, compared with a $3.68 loss last year. Further, analysts expect DoorDash's annual sales to increase 24% to $66.2 billion.
DASH Stock: Technical Ratings
Meanwhile, DASH stock has an IBD Composite Rating of 90 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating — with the best growth stocks scoring above 90.
Further, DASH has an IBD Relative Strength Rating of 95 out of 99. The Relative Strength Rating shows how a stock's price performance stacks up against all other stocks over the last 52 weeks. The best growth stocks typically have RS Ratings of at least 80.
Also, DASH stock is on the IBD 50 premier growth-stock list. DoorDash shares are also on IBD's Tech Leaders list.
