DoorDash Stock Is Falling Because Wall Street’s Initial Coverage Is Mostly Dim on Valuation
Full Answer
Why is DoorDash’s stock going higher?
There are multiple factors that could drive the stock higher. Firstly, Covid-19 cases in the U. S. surged through the holidays and into early January, peaking at over a million cases per day. This is likely to have caused more people to order in rather than head to restaurants, helping demand for DoorDash’s services.
What is DoorDash’s valuation?
See our analysis DoorDash Valuation: Expensive Or Cheap? for more details on DoorDash’s valuation. We value DoorDash at about $115 per share, about 9x forward revenues.
Can DoorDash grow revenue without increasing working capital or fixed assets?
Each of the above scenarios assume DoorDash grows revenue, NOPAT, and FCF without increasing working capital or fixed assets. This assumption is highly unlikely but creates best-case scenarios that demonstrate how high expectations embedded in the current valuation are.
How does DoorDash’s growth compare to Uber and GrubHub?
Firstly, growth has been much stronger, with Revenue on track to grow about 200% each year between 2018 and 2020. This compares to annual growth rates of about 34% for Uber, 85% for Lyft, and 39% for Grubhub over the last two years. Secondly, DoorDash has also cut its losses, as its Revenues have expanded much more quickly than its cost base.
Is DoorDash stock a good buy?
However, there's probably value in DoorDash stock at current levels. DoorDash trades at about 4x projected 2022 revenues, which is well below the 16x forward revenue multiples the stock traded at in 2021.
Is DoorDash undervalued?
Relative to the current share price of US$105, the company appears quite undervalued at a 39% discount to where the stock price trades currently.
Why did DoorDash stock go down?
The decline added to significant short-term losses for the food delivery business, whose stock is down over 50% so far in 2022. It was powered by concerns about DoorDash's late Thursday earnings report.
Is DoorDash in financial trouble?
The platform's losses grew too, increasing to $468 million for 2021 compared to 2020. DoorDash CFO Prabir Adarkar attributed this increase to the company's expansion into new verticals and investment in international growth.
What is the outlook for DoorDash?
The 18 analysts offering 12-month price forecasts for DoorDash Inc have a median target of 123.00, with a high estimate of 200.00 and a low estimate of 80.00. The median estimate represents a +57.57% increase from the last price of 78.06.
Is dash overvalued?
While DoorDash has seen demand for its services soar through Covid-19, garnering roughly half the U.S. delivery market, we still think the company is quite overvalued at current levels, and estimate its fair value at closer to $90 per share.
Do you make more with uber eats or DoorDash?
According to ZipRecruiter, Uber Eats drivers earn an average of $41,175 per year compared to DoorDash drivers' $36,565. Whereas the 25th percentile for both services earn $27,000, the 75th percentile earn $44,500 and $41,500 with Uber Eats and DoorDash, respectively.
What are the risks of DoorDash?
According to the new TipRanks' Risk Factors tool, DASH's main risk category is Finance & Corporate, which accounts for 41% of the total 79 risks identified for the stock. Recently, the company updated its risk profile with five new risk factors related to the pending Wolt acquisition deal.
How do you make money when stock goes down?
One way to make money on stocks for which the price is falling is called short selling (also known as "going short" or "shorting"). Short selling sounds like a fairly simple concept in theory—an investor borrows a stock, sells the stock, and then buys the stock back to return it to the lender.
Is DoorDash losing business?
Uber Eats and DoorDash revenue in 2021 The business had been moving in that direction over the course of 2021, when it began with a loss of $200 million. DoorDash turned a profit all four quarters last year, but its most recent income number is a drop from the previous two quarters.
Will DoorDash ever be profitable?
DoorDash has never made a profit and although the US food delivery market is consolidating, it still looks unlikely that it will post a profit in 2021.
Will DoorDash be around for a long time?
Analysts believe DoorDash is positioned to see more of the same for the first half of 2021 at least. What they want to know from the company is how it intends to differentiate itself once vaccines become more widely deployed and more Americans are able to resume eating at restaurants.
How much is DoorDash worth in 2020?
We expect it to rise to about $24 billion in 2020, as Covid-19 caused orders made on the platform to surge almost 3x over the first nine months of the year.
Does DoorDash own Chowbotics?
Separately, DoorDash also acquired Chowbotics - a startup that sells robotic equipment that can automate the process of making meals such as salads and poke bowls. It’s possible that DoorDash’s increasing interest in automating food production is also helping the stock.
How much has Doordash stock rallied?
DoorDash Stock has rallied by about 20% since the company’s earnings were published on May 13. While the company’s demand outlook was encouraging we still have some reservations regarding the company’s profitability. DoorDash hasn’t really been able to improve the economics of its business despite its rapid growth.
How much is DoorDash losing in 2021?
DoorDash hasn’t really been able to improve the economics of its business despite its rapid growth. Operating loss for Q1 2021 stood at $99 million, only a slight improvement from the $123 million loss it posted in Q1 2020.
How much is Doordash gross order value in 2021?
Over its Q1 2021 earnings call, Doordash actually upped its guidance for its gross order value this year to between $35 billion and $38 billion, up from a prior range of $30 billion to $33 billion. That marks a year-over-year growth rate of as much as 55% on the upper end of guidance.
Does DoorDash have e-commerce?
While DoorDash’s contracts with most of the largest U.S. restaurant brands and its subscription offering help it to an extent, it doesn’t fully mitigate the risks for the company. E-commerce is eating into retail sales, and should present a big opportunity for the logistics industry.
The delivery platform made a pair of announcements that has the investment world buzzing
A Fool since 2019, and a graduate of Cal State LA with a B.S. in Finance and M.A. in Economics. Parkev is an adjunct professor of Finance and enjoys reading about financial and economic history. You'll often find him writing about stocks in the consumer goods and technology sectors.
Revenue nearly triples in Q1
DoorDash reported revenue of $1.1 billion for its first quarter. The result was much better than what analysts on Wall Street were expecting. The outperformance came as folks who started using DoorDash during the worst days of the pandemic maintained the habit even as states were easing restrictions at restaurants.
Rite Aid partnership
On May 11, DoorDash announced a partnership with Rite Aid.
The third-party delivery company may face some tough times in the near future
Rich has been a Fool since 1998 and writing for the site since 2004. After 20 years of patrolling the mean streets of suburbia, he hung up his badge and gun to take up a pen full time.
What happened
Shares of DoorDash ( NYSE:DASH) tumbled 14% in late-day trading Monday despite the third-party delivery leader getting a price-target boost from Wall Street.
So what
Truist analyst Youssef Squali bumped his price target on DoorDash 10% to $210 from $190 because he believes the delivery specialist will report strong fourth-quarter results later this week.
Now what
Dr. Fauci, President Biden's lead COVID-19 specialist, says just because we get the vaccine doesn't mean we'll be able to return to our routines. We'll continue to need to wear masks and practice social distancing, according to Fauci. However, consumers will likely resume normal activities despite the risk.
The Race to The Bottom
- Platform technology companieslike DoorDash often find it difficult to defend their concepts from competitors, as they're rather simple and inexpensive to replicate. If consumers are presented with a handful of platforms that do the same thing, the price might be the only difference-maker, and that triggers a race to the bottom as competitors jostle to earn business. Anyone who's eve…
The Great Deceleration
- As time goes on, it's becoming evident that 2020 might've been the company's peak year for growth. Data source: DoorDash, Yahoo! Finance. YOY = year over year. When zooming in to observe just the last year, the rapid decline in growth rate becomes even more apparent. Data source: DoorDash. YOY = year over year. Additionally, DoorDash's gross order volume (GOV) -- th…
Why Investors Shouldn't Buy The Stock
- DoorDash has so far failed to convert its pandemic success to the bottom line, which has investors rightfully questioning whether it will ever generate a profit. To circle back to the competition argument from earlier, part of the problem is the money DoorDash needs to spend to retain existing customers and acquire new ones. Over the last 12 months...