Uber and DoorDash Second-Half Estimates Cut at JMP on FX Headwinds

2022.07.15 23:03

Uber (UBER) and DoorDash (DASH) Second-Half Estimates Cut at JMP On FX Headwinds

Uber (NYSE:UBER) and DoorDash Inc (NYSE:DASH) second-half estimates were lowered by JMP Securities analyst Andrew Boone on Friday.

However, Boone maintained a Market Outperform rating and $69 price target on Uber and a Market Outperform rating and $150 price target on DoorDash but stated they are lowering estimates as FX has worsened. In addition, the analyst claimed third-party traffic data suggests demand slowed in June with macro headwinds growing and food delivery estimates lowered more than mobility.

“We believe there is a current consumer shift from goods to experiences that continues to benefit Uber’s mobility business near term, while we believe food delivery is a persistent trend that will last beyond the pandemic. Additionally, we believe the U.S. consumer remains healthy given strong employment levels and labor demand, however, we are increasingly sensitive to slowing growth, despite June data being just one month, and we are proactively lowering numbers given our expectations that management teams will take an increasingly conservative approach to guidance,” wrote Boone.

JMP maintained their rating and price target on Uber based on “~1x 2023E EV/gross bookings of $139B (+19% Y/Y).”

“Food delivery is proving a persistent consumer habit. This as Uber is increasingly focused on cost discipline—in May it called hiring “a privilege”—as we believe it has multiple levers to continue expanding EBITDA margins going forward,” explained the analyst.

On DoorDash, the firm maintained its rating and price target based on “~1x 2023E EV/gross order value (GOV) of $65B (+22.5% Y/Y).”

“We justify our PT and valuation multiple given DoorDash’s leading position in food delivery, its 10M+ DashPass subscribers, and new growth verticals, including convenience and grocery. While we acknowledge the risk of incremental European investments, we believe DoorDash has multiple levers to drive profitability.”