DoorDash Stock Gets an Upgrade: Why It Could Outperform Uber

DoorDash, Inc. (NYSE: DASH) has received a bullish upgrade from BTIG, with the brokerage firm raising its rating from "neutral" to "buy" and setting a price target of $155. This upgrade comes amidst strong third-quarter growth for DoorDash, despite broader consumer weakness. The upgrade reflects several key factors, including DoorDash's ability to maintain growth momentum and its robust market position.

DoorDash's third-quarter growth has been impressive, with the company reporting a 34.1% increase in its stock price year-to-date. This growth can be attributed to several factors, including DoorDash's strong market position, innovative product offerings, and effective cost management. DoorDash's market share in the U.S. food delivery market has been steadily increasing, and the company has successfully expanded its services to new verticals, such as grocery and convenience store delivery.

In contrast, Uber Technologies, Inc. (NYSE: UBER) has faced headwinds in its food delivery segment, with its Eats business struggling to maintain market share and profitability. Uber's food delivery segment has been impacted by increased competition and regulatory challenges, which have led to a decline in its stock price. Despite Uber's recent efforts to refocus its business and cut costs, the company's food delivery segment continues to underperform compared to DoorDash.

The upgrade of DoorDash's stock rating by BTIG reflects a growing optimism among analysts about the company's prospects. Of the 36 analysts covering DoorDash, 14 still recommend a tepid "hold," indicating that there is still room for further upgrades. This sentiment is supported by DoorDash's strong third-quarter performance and its potential for continued growth.


DoorDash's strong third-quarter growth has also been reflected in its options market. The company's Schaeffer's put/call open interest ratio of 0.93 ranks higher than 89% of readings from the past year, indicating that short-term options traders have favored puts of late. However, this trend may be reversing, as DoorDash's stock price has been on an upward trajectory, and the company's fundamentals remain strong.


In conclusion, DoorDash's strong third-quarter growth and robust market position have led to a bullish upgrade from BTIG. The upgrade reflects DoorDash's ability to maintain growth momentum and its potential for continued outperformance in the food delivery market. As DoorDash continues to innovate and expand its services, investors should consider the company as a more promising play on the gig economy than Uber.