DoorDash Is Joining the S&P 500. Is DASH Stock a Buy, Sell, or Hold Now?
DoorDash (DASH) is in focus on Monday, March 10 following news the online food ordering and delivery company is set to become a part of the benchmark S&P 500 Index ($SPX) on March 24.
A U.S.-based company is eligible for inclusion in the S&P 500 only if it has reported positive earnings in its latest reported quarter as well as cumulatively over the past four quarters.
DoorDash met these and a bunch of other criteria to find itself a spot in the benchmark index. Its stock has rallied nearly 70% since late July, but the S&P 500 inclusion may help unlock significant further upside in it in 2025.
How to Play DoorDash Stock Ahead of S&P 500 Inclusion
U.S. stocks tend to lose more than 1% in the week following their S&P 500 inclusion, according to Barclays analyst Benjamin Budish.
However, in the build up to their inclusion, they often gain as much as 7%, a historical pattern that makes DoorDash stock worth owning at current levels, Budish argued in a recent research note.
Plus, if the food delivery company were to pull back following its inclusion in the S&P 500 on March 24 as Budish is projecting, it may only create another buying opportunity, given the strength of its financials.
In February, DoorDash reported $2.87 billion in revenue for its fiscal fourth quarter versus the analyst estimate of $2.84 billion.
DoorDash Financials Warrant an Investment at Current Levels
DoorDash stock remains an exciting investment for 2025 also because management sees continued momentum in Q1.
CFO Ravi Inukonda guided for $22.8 billion in gross order value last month compared to the $22.4 billion that experts had forecast.
On Monday, analysts at the Bank of America also agreed that S&P 500 inclusion could prove to be a meaningful catalyst for DoorDash shares.
They reiterated their “Buy” rating on the San Francisco-headquartered firm today and said its stock could hit $245 by the end of this year, indicating potential upside of more than 40% from here.
Wall Street Sees Further Upside Ahead in DoorDash Shares
Investors should note that Wall Street at large is bullish on DoorDash shares ahead of their inclusion in the S&P 500 Index.
The consensus rating currently sits at “Moderate Buy” with a mean target of $222 that translates to potential upside of nearly 30% from current levels.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.