DoorDash stock receives upgrade from MoffetNathanson

MoffettNathanson analyst Michael Morton has upgraded meal delivery company DoorDash (DASH) to Buy from Neutral and raised its price target to $164 from $118.

Yahoo Finance's Josh Lipton and Julie Hyman discuss how the company is seeing expanded adoption despite initial projections of student loan-related risk.

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This post was written by Angel Smith

Video transcript

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JOSH LIPTON: Check it in on, another call the day, DoorDash catch an upgrade to buy over at Moffett Nathanson, Michael Morton. The analyst on the note also raised his price target on DoorDash to $164. So Moffett Nathanson, bullish again, Julie, the issue is, they thought there was risk from student loans. But it didn't happen, it didn't actually materialize, instead the analysts saying, listen, his checks actually indicating that DoorDash is gaining share.

And also an increasing rate of adoption, he adds. For grocery delivery too argues, he thinks they're going to take share from Instacart.

JULIE HYMAN: Yeah. And this was interesting because it's of a mea culpa here saying that the student loan risks that he had anticipated did not in fact come to pass here. Overall, talking about US restaurant delivery, he's saying some investors skepticism is remaining in terms of the ability to grow order frequency, how often you order. But he said there is still ample opportunity in the space more broadly here.

And in addition to DoorDash, in grocery that Amazon and Walmart are also going to team up-- not literally team up, but combine will take share from Instacart.

JOSH LIPTON: Yeah. He says here, we've always loved DoorDash's long-term growth story. We were worried about short-term headwinds, we were in retrospect too cute by half. Julie, that's where it comes down.