DoorDash Inc (NASDAQ: DASH) is partnering with Lowe's Companies Inc (NYSE: LOW) to make an entry into the home improvement market.
The monetization potential of the company's new retail vectors, including grocery and convenience, is likely to become "more tangible over the next 12+ months," according to Benchmark.
The DoorDash Analyst: Mark Zgutowicz initiated coverage of DoorDash with a Buy rating and price target of $165.
The DoorDash Thesis: Given its massive scale, the company's foray into new verticals could afford it "greater velocity of revenue and contribution margin" than is reflected in the current consensus, Zgutowicz said in the initiation note.
The divergence between DoorDash and the "well-funded #2" Uber Technologies Inc's (NYSE: UBER) Uber Eats continues to grow, with the former comfortably holding "a 3x relative share position" since 2020, the analyst stated.
"DASH's relative advantages in network scale, S&M leverage, and fixed cost leverage, along with "dramatic" internal improvement in grocery profitability TTM, sets the table for U.S. grocery GOV and contribution profitability inflection NTM+," Zgutowicz wrote.
"DASH has yet to meaningfully tap into Retail Media advertising, an important point to consider for attach rates to non-restaurant GOV over the next several years," he added.
DASH Price Action: Shares of DoorDash had risen by 0.59% to $139.60 at the time of publication on Thursday.