Yahoo Finance DoorDash, Inc. (NASDAQ:DASH) Just Released Its First-Quarter Earnings: Here's What Analysts Think
There's been a notable change in appetite for DoorDash, Inc. (NASDAQ:DASH) shares in the week since its quarterly report, with the stock down 13% to US$114. Revenues of US$2.5b beat expectations by a respectable 2.5%, although statutory losses per share increased. DoorDash lost US$0.06, which was 26% more than what the analysts had included in their models. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for DoorDash
After the latest results, the 36 analysts covering DoorDash are now predicting revenues of US$10.3b in 2024. If met, this would reflect a decent 13% improvement in revenue compared to the last 12 months. DoorDash is also expected to turn profitable, with statutory earnings of US$0.14 per share. In the lead-up to this report, the analysts had been modelling revenues of US$10.2b and earnings per share (EPS) of US$0.24 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.
The consensus price target held steady at US$133, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values DoorDash at US$170 per share, while the most bearish prices it at US$107. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that DoorDash's revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2024 being well below the historical 29% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.7% per year. Even after the forecast slowdown in growth, it seems obvious that DoorDash is also expected to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for DoorDash. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$133, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on DoorDash. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple DoorDash analysts - going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for DoorDash that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
