See our dashboard on DoorDash Revenue for an overview of DoorDash’s business model and how its revenues are likely to trend. See our analysis DoorDash Valuation : Expensive Or Cheap? for more details on DoorDash’s valuation. DoorDash is looking to move into delivering more lucrative products such as alcohol and non-perishable goods, while also expanding its international footprint. DoorDash trades at under 3x projected 2022 revenues, which is well below the 16x forward revenue multiples the stock traded at in 2021. That said, we remain positive on the stock, with our price estimate standing at about 25% ahead of the current market price. This could mean that DoorDash will take some time to turn profitable. Adjusted gross margins have trended steadily lower falling from about 56% roughly to 47% in Q3 2022. Moreover, profitability also remains elusive for the company, despite its rising delivery volumes and revenues. could be headed into a recession and this could impact DoorDash given that delivery demand is largely levered toward discretionary spending. Firstly, there are concerns that the U.S. We have reduced our price estimate for DASH stock to about $60 per share, from a previous estimate of $100 per share, due to a couple of factors. The company’s Dashpass service, which has higher customer loyalty and order rates, also grew sequentially to all-time highs. Total revenues also grew by 33% year-over-year during the quarter, coming in ahead of Street estimates. Over Q3 2022, DoorDash grew marketplace gross order value by 21% year-over-year to $12.6 billion, excluding the results of the recently acquired Finnish delivery service Wolt. DoorDash’s growth has also been reasonably strong. That being said, the food and grocery delivery story remains largely intact as a theme, despite the easing of Covid-19 and a recovery of brick-and-mortar retail. High inflation and a tight labor market have also proven dampeners for DoorDash. Firstly, investors have pivoted away from pandemic favorites and highly valued tech stocks amid rising interest rates. There have been many negative factors impacting DoorDash. Beata Zawrzel/NurPhoto via Getty Images) NurPhoto via Getty Imagesįood delivery player DoorDash stock (NYSE: DASH DASH) had a very challenging 2022, declining by over 65% over the year. I’d love to hear what you thought about my “Stock to Avoid” article today.Doordash logo sign is seen in a restaurant in Chicago, United States, on October 17, 2022. With the market in flux, and tech stocks experiencing a bit of a resurgence to start 2023, I want to highlight what’s next for the AI mega trend and your best ways to follow it as an investor. I’m switching it up a bit in tomorrow’s Stock Power Daily. Stay Tuned: What’s Next for the AI Mega Trend That’s what makes DoorDash stock one to avoid for your portfolio. While food delivery services remain popular in the U.S., our Stock Power Ratings system shows you that certain stocks in the sector are not.ĭoorDash is hampered by poor financials … which isn’t likely to change anytime soon. That means we consider it “High-Risk” and expect it to underperform the broader market. The hospitality services sector has dropped 1.3% in the last 12 months:ĭASH stock scores a 2 out of 100 on our proprietary Stock Power Ratings system. The company has a miserable return on equity of negative 15.3% and a return on investment of negative 14.2%, earning it a 39 on quality.Īll of this tells us the stock is not profitable and is experiencing only small growth.ĭASH stock has had a rough 12 months, falling 48.2% Its share price is almost 70% below its IPO price in 2020. After Hours trades will be posted from 4:15 p.m. It also scores in the red on our value and quality factors.ĭoorDash has negative price to earnings, meaning it’s not generating any profit. That shows why DASH scores a 24 on growth.
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