- Raymond James analyst Aaron Kessler initiated coverage on DoorDash, Inc (NYSE: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.
