DoorDash shares came under pressure after Jefferies downgraded the stock from “Buy” to “Hold,” citing concerns that its recent rally has fully priced in strong operational execution. Despite the downgrade, Jefferies raised its price target from $235 to $250, reflecting confidence in the company’s performance but caution over its valuation. The firm emphasized that DoorDash has demonstrated robust order volume, efficient logistics, and consistent market share growth, yet its current price-to-EBITDA multiple suggests limited upside in the near term.
DoorDash has benefitted from sustained demand for food delivery and convenience services, even as consumers return to in-person dining and shopping. Its investments in last-mile infrastructure, new verticals like groceries and retail, and international expansion have positioned it as a category leader. Furthermore, the company’s adaptability in navigating macroeconomic shifts and improving unit economics have bolstered investor sentiment, contributing to a significant stock price increase over the past six months.
However, Jefferies analysts argue that future growth may already be factored into the valuation, and investors seeking entry points may benefit from waiting for a pullback. With DoorDash trading at roughly 29 times its projected 2026 EBITDA, the stock appears to be pricing in a near-flawless execution scenario. This premium valuation leaves limited room for disappointment should growth slow or competition intensify. Additionally, the broader market environment, including interest rate uncertainty and inflationary pressures, could weigh on consumer discretionary spending, potentially affecting delivery volumes.
The downgrade does not reflect doubts about the company’s fundamentals, but rather a recalibration of expectations in a market where tech valuations are increasingly scrutinized. DoorDash’s path to profitability and long-term sustainability remains intact, but near-term investor returns may hinge on the broader macro context and the firm’s ability to continue outpacing competitors. Rivals like Uber Eats and Instacart are also investing heavily in technology and partnerships, further intensifying the battle for consumer loyalty.
DoorDash’s downgrade by Jefferies underscores the tension between strong execution and high valuation. While the company continues to lead the delivery market with strategic innovations and operational efficiency, its current stock price may reflect peak optimism. Investors are advised to weigh growth prospects against premium multiples, especially in a sector exposed to both economic cycles and rapid competitive shifts. The company remains fundamentally sound, but the outlook now rests more on sustaining momentum than expanding valuation multiples.