While the higher multiples versus delivery are partly justified by DoorDash’s breakneck revenue growth (over 45% growth projected for 2021), we have concerns about DoorDash’s unit economics. In comparison, ride hailing and food delivery major Uber trades at about 6x projected revenue, while Just Eat, a food-delivery services company that was recently created via the merger of European players Takeaway and Just Eat trades at about 4x trailing pro-forma revenue. The stock currently trades at a high 14x forward revenue, more like a software-type business that has thicker operating margins and more operating leverage.
However, despite the recent optimism, we think DoorDash stock looks overvalued at current levels of almost $180 per share. Concerns about post-IPO lockup expirations have also eased, as it is now over six months since the company went public. Analysts have also upped their price estimates for DoorDash stock, as the company focuses on expanding into new geographies and beyond its core food delivery vertical with announcements of new partnerships for groceries and other items. Sentiment for DoorDash’s stock has picked up after its Q1 results published in early May when the company raised its full-year revenue guidance, making investors more optimistic about its post-pandemic prospects. There are a couple of factors driving the gains. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via Getty ImagesĭoorDash stock (NYSE: DASH) has rallied by almost 25% over the last month, significantly outperforming the S&P 500 which gained about 3% over the same period. BRAZIL - 1: In this photo illustration the DoorDash logo is seen displayed on a smartphone.
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