DoorDash (DASH) is a Zack Rank #1 (Strong Buy) that is a food delivery and logistics company. The company provides a platform that connects customers with local restaurants, grocery stores, and other retailers, enabling them to order meals or goods and have them delivered to their doorsteps.
The stock is up over 70% since last July, so the question for investors is if there is more on the menu for 2025. With last quarter’s earnings serving up impressive growth and analysts raising their estimates, the table is set for a tasty year ahead.
About the Company
Headquartered in San Francisco, DoorDash operates a logistics and technology platform that connects merchants, consumers, and independent contractors (Dashers) in the United States and internationally. Its primary offering, the DoorDash Marketplace, serves over 37 million monthly active users, facilitating the purchase and delivery of goods from local merchants.
DoorDash provides services like customer acquisition, order fulfillment, payment processing, and customer support, while also offering merchants advertising opportunities to grow sales. Its platform also includes features for managing employee payroll, tips, and scheduling, as well as robust reporting and analytics tools to help restaurants drive data-driven decisions.
In 2023, DoorDash generated $2.303 billion in revenue, facilitated 2.16 billion orders, and achieved a gross order volume of $66.77 billion, reflecting strong year-over-year growth. Founded in 2013 and formerly known as Palo Alto Delivery Inc., DoorDash completed its IPO in December 2020.
The stock has a Zacks Style Score of “A” in Growth and Momentum. However, the company has a Forward PE of 86, giving the stock a Style Score of “F” in Value.
Q3 Earnings Beat
On October 30th, the company reported an 80% EPS beat, helping the stock move over 15% higher in the following weeks.
The standout Q3 performance, showcased DoorDash’s robust growth and profitability milestones that underscore its strength and long-term potential. The company reported earnings of $0.38 per share, a 300% improvement from a loss of $(0.19) per share in the same period last year. Quarterly revenue surged 25% year-over-year to $2.706 billion, exceeding the consensus estimate of $2.660 billion. Total Orders grew 18% to 643 million, while Marketplace Gross Order Volume (GOV) climbed 19% to $20 billion, driven by increased consumer engagement and expanding user growth.
DoorDash achieved positive GAAP net income for the first time since going public, reflecting its commitment to sustainable growth and operational excellence. The company emphasized its strategy of reinvesting in services and innovation to support local merchants and expand local economies.
DoorDash, Inc. Price and EPS Surprise
Estimates Headed Higher
While the valuation will keep some investors away, analysts see growth ahead and are raising earnings estimates. Since Q3 earnings were reported back in October, revisions to earnings have gone higher across all time frames.
For the current quarter, estimates have gone from $0.19 to $0.33 over the last 90 days. This is a 73% jump, with next quarter seeing a 100% move higher, going from $0.18 to $0.36.
For the current year, estimates have been taken from -$0.03 to $0.26 over that same time frame. For next year, analysts now see $1.94, up 42% from the $1.37 expected 90 days ago.
Analysts also took their price targets higher, with most price targets ranging from $160-190. Most of these targets have been hit with the stock already printing $181 in December.
More recently firms such as Citigroup, JMP, RBC and Truist have posted price targets over $200. If the company can perform on earnings when it reports in February, the upward momentum should continue.
The Technical Take
The stock has seen a slow move higher since August, which has taken the stock from just over $100 to $180. This is a big move in just half a year, so naturally investors are starting to take some profits.
The stock has pulled back off last year’s highs, so let us look at some buyable support levels.
21-day Moving Average: $173
50-day MA: $170
200-day: $136
Fibonacci buy zone (50%-61.8% retracements): $132-141
It would take a large pullback in the markets or an earnings disappointment to retrace back down to that $130-40 area. While that 200-day might be out of reach, investors could start to build positions at those higher levels.
In Summary
DoorDash continues to deliver impressive growth and strong financial performance, positioning itself as a leader in the food delivery and logistics industry. With a robust platform connecting millions of users and merchants, the company’s innovative approach to driving engagement and supporting local economies sets it apart.
Analysts are increasingly bullish on DoorDash’s prospects, as reflected in upward earnings revisions and elevated price targets, some exceeding $200. While valuation concerns may deter value-focused investors, the company’s growth trajectory, profitability milestones, and strong technical support levels make it an appealing option for those seeking momentum in their portfolios.
— Jeremy Mullin
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Source: Zacks