Student loan repayments are set to resume in October – and that means there will be fewer dollars in borrowers’ budgets to order through DoorDash , according to MoffettNathanson. To that effect, the firm cut its rating on the food delivery stock to market perform and reduced its price target to $93 from $110. “Does the resumption of loan repayments introduce bookings risk to food delivery?” said analyst Michael Morton in a Friday note. “We fear the answer is yes.” After three years, the Department of Education’s Covid-relief pause for federal student loan borrowers is winding down. Student loan interest resumed accrual on Sept. 1, and payments will be coming due in October. That means borrowers could be on the hook for $225 per month in average student loan repayments, according to estimates from MoffettNathanson. DoorDash has a greater proportion of monthly active users in the 25- to 44-year-old cohort compared to any other company in the firm’s coverage, the analyst said. “Unfortunately, these age cohorts carry 69% of the U.S. student loans,” Morton said, citing federal disclosures. DoorDash is up 64% this year, but the shares’ performance isn’t reflecting the risk facing the delivery company, the analyst added. “What concerns us are expectations for bookings growth of 15% in FY24 on an incremental ~300M orders,” he said. “This does not appear reflective of a ~16% hit to the discretionary income of 43 million consumers.” – CNBC’s Michael Bloom contributed reporting.
