DoorDash Draws Institutional Buying as Competition Heats Up
Major institutional investors increased their stakes in DoorDash following strong quarterly earnings, even as Amazon and Uber Eats intensify rivalry in the food delivery market.
Institutional investors have recently expanded their holdings in DoorDash, Inc. According to regulatory disclosures, Keybank National Association OH boosted its position by 2,914.8% during the third quarter to 160,962 shares valued at $29,545,000. New York Life Investment Management LLC also increased its stake by 391.2% in the same period, acquiring 206,484 shares to end with 259,271 shares worth $47,589,000. Institutional entities now hold 90.64% of the delivery company's stock.
The institutional buying follows third-quarter earnings reported on Thursday, October 29th. DoorDash generated $1.06 in earnings per share, surpassing consensus estimates of $0.81 by $0.25. Revenue climbed 34.0% year over year to $4.62 billion, beating Wall Street expectations of $4.56 billion. Net margin reached 6.23%, with return on equity at 10.40%. For the current fiscal year, analysts anticipate earnings per share of 2.69.
At the same time, DoorDash faces mounting competitive pressure. On Thursday, November 5, Amazon added Uber Eats to its US Prime membership, replacing its prior relationship with Grubhub. The integration allows Prime members to order from hundreds of thousands of restaurants through Amazon apps with waived delivery fees on eligible orders of at least $25. DoorDash is countering competitive pressures by pursuing a proposed $17 billion acquisition of Instacart and expanding a partnership with Lyft through a shared membership program.
Securities filings also show notable insider transactions in prior months. Director Andy Fang sold 15,000 shares on Tuesday, September 1st, at an average price of $228.31. Director Stanley Tang sold 72,367 shares on Friday, August 21st, at an average price of $225.16 to satisfy tax withholding obligations. Both transactions were executed under pre-arranged Rule 10b5-1 trading plans. Insiders collectively sold 349,430 shares valued at $76,644,002 over the last three months, retaining 44.90% ownership.
Brokerage sentiments remain generally constructive. According to MarketBeat.com, analysts hold a consensus Moderate Buy rating on the stock with an average price target of $249.82. Recent updates include Wedbush upgrading the shares to outperform with a $230.00 target on Friday, October 30th, while Barclays lowered its price target to $205.00 with an equal weight rating.