DoorDash's Stock Surges on Bullish Bets, But Labor and Regulatory Risks Loom

DoorDash Inc. (DASH) has surged over 30% in recent weeks, fueled by a wave of analyst upgrades and bullish projections that signal a potential trend reversal for the delivery giant. The stock, which closed at $258.15 as of October 27, 2025, has drawn renewed attention from Wall Street following reinstated coverage from major firms like Goldman Sachs and Barclays, despite lingering workforce controversies and a short-seller's damning report.

Goldman Sachs reinstated coverage with a "Buy" rating and a $315 price target, while Barclays set an "Equal-Weight" recommendation with a $272 target. These moves followed a string of upgrades from Truist Securities, Morgan Stanley, and BTIG, all citing DoorDash's strong operational performance and strategic investments in its global footprint. Goldman Sachs analyst Eric Sheridan highlighted the company's "favorable risk/reward ratio of 3:1," emphasizing its potential to capitalize on delivery demand growth.

The optimism extends to financial metrics: DoorDash reported $11.895 billion in revenue for the period, with a gross margin of 50.04% and a net margin of 6.57%. Analysts argue that the company's expansion into non-restaurant categories—such as grocery and retail—and its acquisition of Wolt, which expanded its reach into Europe and Asia, position it for sustained growth.

However, the bullish narrative faces headwinds. A recent Benzinga report on short-seller Culper Research alleged that DoorDash's reliance on "unauthorized workers"—Dashers using Individual Taxpayer Identification Numbers (ITINs) instead of Social Security Numbers—creates a fragile business model. Culper claims that these ITIN holders, who may lack work authorization, account for up to 50% of active Dashers in major markets and are responsible for 26% to 57% of deliveries. The firm warned that a 10-11% pay increase could erase DoorDash's $1.9 billion adjusted EBITDA in 2024.

Separately, Simply Wall St. noted that allegations of lax worker oversight could shift investor sentiment, as automation's margin-boosting potential clashes with growing concerns over labor practices. These issues intersect with broader debates about automation's impact on low-skill jobs, as highlighted in a The Verge analysis, which argued that delivery platforms like DoorDash are displacing traditional entry-level jobs for young workers.

Despite these risks, DoorDash's stock has benefited from a broader shift in market sentiment. The company's P/E ratio of 142.62 remains elevated, but analysts argue its P/S ratio of 9.7 and aggressive innovation—such as drone delivery pilots—justify the valuation. Meanwhile, the recent government shutdown prompted air traffic controllers like Jack Criss to turn to DoorDash for supplemental income, illustrating the platform's role in a gig economy increasingly shaped by economic uncertainty.

Wall Street's divided stance reflects the stock's inherent volatility. While the average price target among 40 analysts is $303.04 (implying a 17.39% upside), GuruFocus estimates a $176.11 fair value in one year, suggesting a 31.78% downside. This divergence underscores the tension between DoorDash's growth potential and its exposure to regulatory, labor, and operational risks.

DoorDash's 30% rally highlights the market's appetite for high-growth tech stocks, even as fundamental challenges persist. With Goldman Sachs and peers betting on its ability to navigate a competitive delivery landscape, the company's success will hinge on balancing innovation with regulatory compliance and labor sustainability. As the stock trades near record highs, investors must weigh the bulls' optimism against the growing chorus of skeptics questioning the durability of its business model.

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