DoorDash Expands Footprint to Japan; Street Sees 23% Upside

On-demand logistics platform for last-mile delivery, DoorDash (DASH), has launched services in Japan. Apart from the U.S., DoorDash now has a presence in Australia, Canada, and Japan.

Japan has one of the highest restaurant densities worldwide and presents DoorDash with a unique market opportunity.

Tony Xu, CEO and Co-founder of DoorDash said, “We are thrilled to bring DoorDash to Japan. Our strategy has always been to empower local economies, especially in the suburban markets that are historically underserved yet the appetite for connectivity between merchants and customers is high.” (See DoorDash stock analysis on TipRanks)

Xu added, “We look forward to helping power the Sendai economy by helping merchants to grow, connecting consumers to those merchants, and creating jobs and flexible earnings opportunities for Dashers.”

The company is beginning its Japan launch in Sendai. Along with its marketplace app, DoorDash is also providing merchants in Sendai access to its Storefront product, which is an affordable online ordering system.

Storefront enables merchants to start accepting online orders irrespective of their size or the availability of a website. Until the end of 2021, the Storefront service will be commission-free and merchants will only have to bear the cost of payment processing fees.

On May 26, RBC Capital analyst Brad Erickson initiated coverage on the stock with a Buy rating and a $175 price target (28% upside potential).

Erickson notes that DoorDash’s differentiated strategy has made it a top player in the U.S. restaurant delivery market and recommends buying the shares on “any driver classification and restaurant relation concerns.”

Based on 5 Buys and 7 Holds, consensus among analysts is a Moderate Buy. The DASH average analyst price target of $168.67 implies 23.3% upside potential.

Shares have gained about 13.5% over the past month.

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