Street View: Analysts favor DoorDash-Instacart deal, regulatory risk in focus
DASH•DoorDash said Thursday it would buy Instacart in a deal valued at about $17 billion, while also beating quarterly revenue estimates; DoorDash shares rose about 6%. Analysts see strategic and financial benefits but focus on regulatory risk.
1. Strategic rationale
Oppenheimer said adding Instacart alongside DoorDash’s Lyft partnership could enhance DashPass value and increase advertising revenue growth opportunities. StoneX Equity Research said the deal could preserve Instacart’s large weekly baskets and DoorDash’s meal and convenience business while integrating backend operations.
2. Regulatory outlook
Needham said the deal makes strategic and financial sense but faces a regulatory hurdle that could hinge on how the Justice Department defines the market. Wedbush also expects regulatory scrutiny but predicted approval, saying the relevant competitive dynamic is the entirety of grocery.
