The shares of DoorDash Inc (NYSE:DASH) are down 0.6% at $51.20 this morning, despite a bull note from Oppenheimer. The analysts upgraded the delivery service staple to "outperform" from "perform," with a $70 price target, and highlighted DoorDash's improving U.S. restaurant margins and easing competition.
Conversely, a few days ago D.A. Davidson lowered its price target from $82 to $60, which is still a 13.6% premium to DASH's current perch. Coming into today, analysts were relatively split, which means even more bull notes could be in the pipeline. Specifically, 11 of the 20 in coverage sport a "hold" rating.
An unwinding of pessimism in the options pits could also boost DoorDash stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 50-day put/call volume ratio of 2.27, which stands higher than 99% of readings from the past year. In other words, the penchant for bearish bets over the last 10 weeks is unusually high.
When we last checked in on DASH, we noted that earnings could help the equity rise on the charts. Indeed, the company's latest quarterly reported ended up being a boon, with DoorDash stock adding 8.3% in its post-earnings session, helping it to turn in a 9.6% return for the week -- its best since Sept. 9. Still, DASH remains down more than 75% in the last 12 months.
This article presents seven large-cap stocks that are regarded as cheap based on their price-to-earnings ratio. The price-to-earnings ratio tells an investor how much they are paying per share for every dollar of a company's profit.
You can find a stock's P/E ratio by dividing its stock price by its earnings per share. That looks like this:
P/E Ratio = Stock Price/Earnings per share (EPS)
For example, if a company is reporting earnings of $3 per share and their stock is selling for $30 per share, the P/E ratio is 10 ($30 per share/$3 per share). Many investors will look at a benchmark index like the S&P 500 as their guide for defining if a company's P/E ratio makes a stock cheap or expensive. At the time of this writing, the average P/E ratio for stocks in the S&P 500 was 14x to 17x. That is the range we're using for determining if a stock is cheap.
Of course, what is considered a “good" P/E ratio may depend on the market sector. For example, technology stocks tend to have a higher P/E ratio than the S&P average because they are projected to have stronger earnings and stock price growth than the broader market.
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