DoorDash (DASH) confirms job cuts, shares fall on RBC downgrade

December 2, 2022 9:09 AM EST
Get Alerts DASH Hot Sheet
Price: $63.81 +8.32%

Rating Summary:
    16 Buy, 11 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 14 | Down: 15 | New: 9
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Shares of DoorDash (NYSE: DASH) are down 5.5% in pre-market Friday after RBC analyst Brad Erickson cut the rating to Sector Perform from Outperform. The analyst also lowered the price target to $60 from $70 per share.

Erickson cited the downgrade on the combination of evident slowing core order growth and limited EBITDA downside support.

“DASH's execution & management are widely considered the class of the sector but approaching '23, we are uncomfortable with a potentially unfavorable risk/reward given likely hypersensitivity to order deceleration,” Erickson said in a client note.

Moreover, New York restaurant checks show Uber (NYSE: UBER) is closing the gap in Manhattan.

“We think UBER's loyalty plan & strong suburb awareness may be at least partial contributors and indicates UBER is on the brink of taking over #1 share from Grubhub/Seamless in Manhattan (worth noting 3p data suggests UBER already has #1 share in the 5 boroughs overall).”

DoorDash confirmed yesterday its plans to cut about 1,250 positions or around 7% of the current employee workforce. The company estimates that it will incur approximately $85 million in restructuring charges.

By Senad Karaahmetovic

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