DoorDash's Selloff Creates Undervalued Growth Opportunity, Analyst Says

Wedbush analyst Scott Devitt has upgraded DoorDash (DASH) to a "buy" rating from "hold," setting a price target of $260, citing strategic investments and a dominant position in the U.S. food delivery market. This move comes after the stock fell over 30% from October highs following mixed third-quarter results and a $2026 spending plan that raised concerns about near-term profitability according to market analysis. Devitt argues the selloff has created an attractive entry point, with DASH trading at 17.7x his 2027 adjusted EBITDA estimate-a valuation he sees as undemanding given the company's long-term growth prospects as data shows.

The analyst highlighted DoorDash's strong fundamentals, including resilient order and revenue growth, a 14% third-quarter gross bookings increase that outpaced guidance by 400 basis points, and a robust position in the U.S. delivery sector . Management's focus on automation, logistics, and international expansion through Deliveroo is expected to sustain profitability once initial investments are absorbed according to analyst projections. Devitt also noted the company's ability to reinvest cost savings into growth initiatives, reinforcing its market leadership as research indicates.

While the stock's 96.26 P/E ratio and recent volatility reflect skepticism, Wedbush's 50% successful rating history and average 12.3% return for DASH suggest confidence in the upgrade. TipRanks' AI model, however, maintains a "neutral" stance with a $211 price target, underscoring divergent views on the stock's trajectory. Devitt's rationale hinges on DoorDash's capacity to execute strategic initiatives, including a global tech platform, new verticals, and geographic expansion, which he believes will expand its addressable market and product offerings .

For investors, the upgrade signals a potential inflection point as DoorDash transitions from near-term challenges to long-term growth. With DASH rebounding over 10% in early December, the stock's ability to hold above key support levels will be critical in determining whether the selloff was a buying opportunity or a deeper correction.