Guggenheim Initiates Coverage on Delivery and Ride-Hailing Sector with Bullish Outlooks for Uber, DoorDash, and Lyft
Guggenheim Initiates Coverage on Delivery and Ride-Hailing Sector
Guggenheim has commenced coverage of the prominent delivery and ride-hailing sector, issuing "Buy" ratings for Uber Technologies (UBER), DoorDash (DASH), and Lyft (LYFT), while adopting a more cautious "Neutral" stance on Instacart (CART). This initiation marks a significant assessment by the investment firm, providing a detailed outlook on the competitive landscape and growth trajectories within the gig economy.
Detailed Coverage and Rationale
Uber Technologies (UBER), with a market capitalization of $196.5 billion, was designated as Guggenheim's top pick, receiving a "Buy" rating and a $140 price target. The firm underscored Uber's industry-leading network, technological capabilities, and strong brand equity as pivotal drivers. Guggenheim's analysis highlights Uber's multi-platform network, which it estimates to be over three times larger than its nearest competitor. Projections indicate that autonomous vehicles (AVs) could account for 20% of the overall U.S. rideshare market by 2035, with international markets following within 5-10 years, positioning Uber to significantly benefit from increased AV supply. The firm also noted a "re-accelerating Delivery business" with sustainable double-digit growth potential, bolstered by tailwinds from grocery, retail, subscriptions, and advertising, which it believes investors have largely overlooked. The $140 price target is based on 24 times Guggenheim's 2027 EV/OIBDA estimate, representing an approximate 80% premium to the S&P 500 but a 20% discount to DoorDash. Complementing this, Mizuho recently initiated coverage on Uber with an "Outperform" rating and a $130 price target, forecasting a 15% compound annual growth rate for revenue from 2025 to 2028.
DoorDash (DASH), currently trading near $270.54, secured a "Buy" rating and a $330 price target from Guggenheim, establishing it as the firm's second-favorite stock in the sector. The research emphasized DoorDash's capacity to extend its leadership in the delivery market. Guggenheim anticipates that the company's investments in Grocery & Retail will transition from a current profit drag to a positive contributor over the medium to long term. The firm projects DoorDash's Marketplace Gross Order Value (GOV) growth to surpass the broader delivery market, driven by volume expansion, as it pursues its ambition to become the local "Everything Store." The recent acquisition of Deliveroo, completed on September 30, 2025, is expected to provide a mid-single-digit tailwind to 2026 Marketplace GOV growth, an international expansion opportunity Guggenheim considers underappreciated. The $330 price target is based on 36 times Guggenheim's 2027 EV/EBITDA estimate, reflecting a 33% premium to high-growth internet peers. InvestingPro data indicates DoorDash maintains "GREAT" financial health. However, its valuation metrics, including a P/E ratio of 149.47, P/S ratio of 10.18, and P/B ratio of 12.94, are near historical highs, suggesting the stock may be overvalued. GuruFocus estimates the GF Value for DoorDash at $173.06, implying a 36.03% downside from its current price.
Lyft (LYFT) was also initiated with a "Buy" rating and a $22 price target. Guggenheim cited the rideshare company's autonomous vehicle partnerships with Waymo and May Mobility as key factors for its positive outlook, referring to these initiatives as the company's "Ticket to Ride" strategy. While acknowledging Uber's superior positioning for increased AV adoption, Guggenheim believes multiple platforms will participate in the AV ecosystem. The firm also suggested that market consensus underestimates the contribution from Lyft's FREENOW acquisition. The $22 price target represents 17 times its 2027 estimated EV/OIBDA, a 29% premium to the S&P 500 but a 29% discount to Guggenheim's Uber target. Other analysts have recently revised their targets: Piper Sandler raised its target to $28 (Overweight), Canaccord Genuity to $18 (Hold), and TD Cowen to $30 (Buy). Mizuho initiated coverage with a "Neutral" rating and a $24 target, citing a balanced risk-reward profile.
Instacart (CART), operating under its parent company Maplebear, received a "Neutral" rating and a $40 price target. Guggenheim's cautious stance stems from anticipated slower growth compared to its gig-economy peers, elevated disintermediation, and competitive pressures. The firm noted the relatively new leadership team, with the CEO joining in August 2025 and CFO in May 2024, contributing to execution risk. Competitive pressures from Amazon, DoorDash, and Uber Eats are reflected in Instacart's recent share underperformance, with the stock down 19% since August 1, while the S&P 500 gained 5% during the same period. Potential growth drivers include its advertising business and Instacart+ subscription service, with advertising revenue growth expected to reaccelerate in 2026. The $40 price target is based on 11 times its 2027 EV/OIBDA forecast, representing an approximate 20% discount to the current S&P 500 trading multiple, reflecting slowing top-line growth and terminal value risk. Notably, Goldman Sachs maintains a "Buy" rating and a $67 price target for Instacart, suggesting that the intensifying competitive landscape is already priced into the stock.
Market Implications and Outlook
Guggenheim's comprehensive initiation of coverage is poised to heighten investor interest and potentially drive positive price movements for Uber, DoorDash, and Lyft. The bullish ratings, coupled with specific price targets and detailed rationale, provide a clearer investment thesis for these companies. The Delivery and Ride-Hailing Sector as a whole is expected to benefit from this major analyst attention, potentially attracting broader institutional investment.
The firm's analysis underscores the increasing importance of autonomous vehicle integration for rideshare companies, projecting significant market penetration by 2035. This long-term trend is a crucial factor influencing Guggenheim's bullish outlook on Uber and Lyft, despite acknowledging Uber's stronger positioning in this regard.
Conversely, the "Neutral" rating for Instacart highlights the intense competitive landscape within online grocery delivery. The firm's concerns regarding growth pace amidst formidable rivals like Amazon, DoorDash, and Uber Eats suggest a more challenging environment for Instacart to differentiate and expand. While Instacart's partnerships with TikTok and United Airlines offer new avenues for growth and engagement, the market will likely scrutinize its ability to execute under new leadership and navigate competitive pressures.
The valuation disparities noted by Guggenheim, such as Uber's premium to the S&P 500 but discount to DoorDash, and DoorDash's high P/E ratios and potential overvaluation according to GuruFocus, signal nuanced investment considerations within the sector. Investors will need to weigh growth prospects against current valuations and competitive dynamics.
Looking Ahead
Key factors to monitor in the coming quarters include the continued adoption and impact of autonomous vehicles on the rideshare market, particularly for Uber and Lyft. For DoorDash, the progression of its Grocery & Retail investments and the integration of the Deliveroo acquisition will be critical to realizing its "Everything Store" vision. Instacart's performance will hinge on its new management team's ability to accelerate growth, leverage its advertising business and subscription services, and effectively counter intensifying competition. The broader economic environment and consumer spending patterns on discretionary services will also influence the trajectory of these gig-economy leaders.
Edgen Stock·Oct 15 2025, 02:09
