Loop Capital begins reviewing Instacart and DoorDash with a Buy rating

Loop Capital begins reviewing Instacart and DoorDash with a Buy rating

Loop Capital analysts began reviewing delivery companies Instacart (CART) and DoorDash (NASDAQ:DASH) with a buy recommendation, setting their price targets at $46 and $170, respectively.

The investment banking firm sees CART as the dominant company for grocery delivery in the U.S. as it continues to increase its share of the market.

“We think the company’s shares are attractive because they are currently valued at a 40% undervaluation compared to the average valuation of other companies in the gig economy sector based on 2025 forecast EBITDA. The continued increase in growth in the first quarter and subsequent quarters is expected to narrow the gap in valuation compared to similar firms.” “We predict that it will act as a driving force,” he said.

Regarding DASH, Loop Capital believes that ongoing debates about the profitability and revenue potential of on-demand gig economy platforms have been resolved.

Underlining that leading companies such as DoorDash continue their strong performance beyond the pandemic period, analysts state that the significant growth in free cash flow generation is “indisputable.”

“DoorDash has positioned itself as the dominant force in the United States market for restaurant delivery and is expanding into other regions and sectors of local commerce,” analysts said.

“Although DoorDash’s market capitalization is higher than most of its competitors, this faster growth rate is warranted due to its superior operational performance and profit potential, which in our assessment is significantly underrepresented by the company’s investments in new market sectors, new geographic areas and new products .”