Mizuho analysts raised the firm's price target on DoorDash (NASDAQ:DASH) to $120 from $105 per share in a note Friday, stating there is "meaningful FY24 EBITDA upside" for the company.
In a note to clients Friday, the analysts, who maintained a Buy rating on the stock, explained that their view follows a metrics deep-dive.
"Our analysis of key operating metrics shows that DASH continues to gain share from favorable unit economics of rational competition, increased labor supply and higher network density," said the analysts.
"At the same time, we see continued margin expansion from lower dasher/customer acquisition costs and disciplined fixed cost spending," they added.
With strong operating leverage and limited market expansion, the firm believes DASH's FY24 EBITDA could be nearly 20% above consensus, "assuming incremental EBITDA margins remain the same level at FY23."
Mizuho raised its FY25 EBITDA forecast for DASH by 13% to $2.4 billion and maintained the stock as a top pick in the OTA and gig economy sectors.