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DoorDash Jumps as Strong Sales Prompt Analyst Upgrades

DoorDash received upgrades from Wells Fargo and Truist Securities following its first-quarter earnings in which the firm narrowed its losses and tripled revenue.

Shares of DoorDash  (DASH) - Get DoorDash Inc. Class A Report rose sharply Friday after the food delivery services company's first-quarter earnings sparked analyst upgrades and price target increases.

Shares of the San Francisco company jumped 20.2% to $138.84 at last check.

Analysts at Wells Fargo Securities  (WFC) - Get Wells Fargo & Company Report and Truist Securities upgraded DoorDash and increased their respective price targets on the stock, citing the company's strong results and outlook.

On Thursday after the close, DoorDash reported that first-quarter revenue tripled to $1.08 billion from $362 million in the year-ago quarter and ahead of FactSet estimates of $994.3 million. Net losses came in at $110 million, or 34 cents a share, down from a loss of $129 million, or $2.92 a share in the same period a year ago, but missing consensus estimates of a GAAP loss of 26 cents a share. 

Wells Fargo upgraded DoorDash to overweight from equal weight and raised its price target to $170 from $165.

The firm said the results and outlook look strong enough "to offset the rotation to ‘value’ that has afflicted ‘growth’ stocks” so far this year, according to Bloomberg News.

Truist Securities upgraded the stock to buy from hold and raised its price target to $185 from $180.

Truist analysts said the strong first-quarter results and sustained momentum “point to DASH’s solid execution and a growing roster of complementary offerings” in a note published on Friday.

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The reopening headwind “may not be as strong as feared,” and a pullback in the stock offers an attractive entry point, the firm added.

Barclays maintained its equal weight rating on the stock, saying the results were strong and that DoorDash “seems more confident in the cadence of its business as the re-opening plays out.”

"There were few negatives to call out,” the firm noted, but investors have shown a muted appetite for loss-making internet companies recently, “so the strong fundamentals may not even matter."

Analysts at Evercore ISI said the results and outlook were strong and provide more evidence of the food-delivery firm’s ability to grow “robustly” despite the reopening and “tough” Covid comparisons.

Evercore has a price target of $137 on DoorDash, which the firm left unchanged.

Meanwhile, Susquehanna Financial Group lowered its price target for DoorDash to $175 from $185.

The firm said results and outlook are “further validation of the strong secular momentum of DASH’s business." But it added that gross order value “will be pressured in 2Q and 3Q by typical seasonality and increasing reopening.”

Barclays reiterated its price target of $160 on the stock.