DoorDash (NYSE: DASH) stock surged 16% on Wednesday after it emerged that the company was acquiring international food delivery firm Wolt.
The $8.1 billion all-stock deal comes as the company ventures into groceries and retail. DoorDash is expected to finalize the acquisition during the second half of next year, as per the press statement.
The arrangement will see Wolt CEO Miki Kuusi manage DoorDash International. The acquisition offers DoorDash an opportunity to expand in the U.S. market, with Wolt focusing on the global market.
The development can be viewed as a positive outlook for the stock after the company reported its quarterly results. Under the results, DoorDash recorded a loss of 30% per share. DoorDash which also emerged as a beneficiary of the coronavirus pandemic registered a net loss of $101 million.
In the last month, DASH has been trading between the range of $187 to $220, which can be considered quite broad. However, It is trading near the high of the range. Overall, the stock has been on an upward trajectory with a handful of catalysts that will potentially push its stock to new highs.
Wall Street analysts projection of DASH stock
Elsewhere, 16 Wall Street analysts have offered a 12-month price target for DoorDash. The analysts provide an average price target is $229.21 with a high forecast of $270.00 and a low forecast of $183. The average price target represents about a 4% change from the last price.
Interestingly, half of the analysts recommend buying the DASH stock while the rest are for holding.
Generally, DoorDash prospects look positive considering the company is a leading food delivery platform in the United States. Furthermore, the firm can scale up its services to explore options for pickups, convenience store pickups, and liquor delivery.
At the same time, the competitive threat posed by firms like Uber Eats cannot be ignored. Uber Eats has aggressively invested in marketing and could easily bring immense pressure to the defending market leader.