DoorDash announced the acquisition of robotics startup Chowbotics, in a move to allow its merchant partners expand on their current menu offerings and offer made-to-order fresh meals. The financial details of the deal were not disclosed.
Chowbotics’ fresh food robot can create customized snacks and dishes such as salads and poke bowls, and is already in use at universities, hospitals and grocery stores. The technology is expected to help businesses offer more items on their menus and attract new customers without having to add a store in a new location.
DoorDash (DASH) noted that the acquisition will help the company increase its merchant services on offer, which include customer acquisition, delivery on demand, analytics and order fulfilment in a cost effective way.
This month, Wells Fargo analyst Brian Fitzgerald initiated a Hold rating on the stock with a price target of $185 (4.3% upside potential). The analyst believes DoorDash could become an iconic brand but investors should look for a better entry point for the stock.
Brian added, “DoorDash is operating from a point of strength as it has grabbed market share twice the size of its closest competitor Uber.”
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 5 analysts recommending a Buy and 13 recommending a Hold. The average analyst price target of $164.47 implies 7.3% downside potential to current levels.