Needham raised the firm’s price target on DoorDash (DASH) to $133 from $105 and keeps a Buy rating on the shares. The analyst also added the shares to the firm’s Conviction List as a 2024 Top Pick in Internet Services, replacing Compass (COMP). Similar to other consumer marketplace stocks, the recession debate has shifted to the backburner as a soft landing now appears to be the base case for the macro, and the company has performed well post-pandemic, with frequency including DashPass adoption driving bookings growth, the analyst tells investors in a research note. Expectations are low for incremental margins in FY24 and FY25 amid upside risk despite the NYC minimum wage legislation for couriers, but while the firm is modeling DoorDash reaching GAAP net income positive in the second half of the year, it could happen one to two quarters earlier if the upside case for incremental margins proves correct, the firm added.
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