DoorDash confirms job cuts, shares fall on RBC downgrade
DoorDash (DASH) confirms job cuts, shares fall on RBC downgrade
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By Senad Karaahmetovic
Shares of DoorDash Inc (NYSE:DASH) are down 5.5% in pre-market Friday after RBC analysts cut the rating to Sector Perform from Outperform. The analysts also lowered the price target to $60 from $70 per share.
They 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,” they 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.
