Analysts at Loop Capital have initiated Buy coverage on Instacart (NASDAQ:) and DoorDash (NASDAQ:) with price targets of $46 and $170, respectively.
The investment banking firm views CART as “the leader in U.S. grocery delivery by a wide margin” as it continues to gain market share.
“We believe the shares trade attractively at a 40% discount to average 2025 EBITDA among giant economy peers. We look forward to continued acceleration in growth in the first quarter and subsequent quarters, which will be a catalyst for narrowing the valuation gap with peers,” the analysts said.
As for DASH, Loop Capital believes that the ongoing debate regarding the viability and revenue potential of on-demand concert platforms has now been resolved.
They note that industry leaders like DoorDash have maintained their momentum even after the pandemic, adding that the significant increase in free cash flow generation is “undeniable.”
“DoorDash has proven to be a category killer in the U.S. restaurant delivery space and is rapidly expanding into other regions and local retail categories,” analysts said.
“While DoorDash carries a valuation premium compared to many peers, it is justified by higher growth, best-in-class execution and earnings, which we believe are significantly understated by investments in new categories, new geographies and new products.” , – they are added.