On April 30, I was one of the judges at the 18th annual Pershing Square Challenge, established by my college buddy Bill Ackman of Pershing Square Capital Management.
Each year, two dozen three-person teams of first- and second-year Columbia Business School students develop stock pitches. The five finalists present to a panel of judges, which this year included me, Bill, and five others.
We awarded the winning team, who pitched food-delivery service DoorDash (DASH), $100,000. The second-place team received $30,000 for their pitch on energy-drink maker Celsius (CELH). And the third-place team, who pitched oil and gas servicer Baker Hughes (BKR), received $20,000.
I was incredibly impressed by all the presentations – not just the three winners but also the other two finalists, who pitched transaction processor Amadeus IT (AMADY) and safety-equipment supplier MSA Safety (MSA).
Each group of students did extraordinary in-depth work over many months – crunching numbers, visiting stores, and speaking with company executives, industry experts, and competitors.
I asked the three winners if they would allow me to share their presentations with my readers, and they said yes.
Today, I'd like to start with the 79-slide presentation on DoorDash – prepared by Zekun Feng, Aaron Samuels, and Elliot Tompras.
In doing so, keep in mind that I'm not recommending the stock – if that were the case, I would be sharing it first, along with our full analysis, with Stansberry's Investment Advisory subscribers. (If you're not already subscribed, you can do so by clicking here.)
Rather, I learned a lot about an interesting company and industry, which I thought my readers would appreciate as well...
The students started with an overview of DoorDash, which dominates with 59% share of the third-party delivery market in the U.S.:
Their investment thesis rests on three pillars: U.S. restaurant growth is more durable than expected... the company's new vertical and international segments will reach profitability earlier than Wall Street's expectations... and its margin expansion from operating expense ("opex") leverage is underappreciated:
The students did 90 interviews with industry participants and investors, concluding that "it was clear DASH is a better operator with a better product" compared with competitors:
Their research revealed extremely positive views of the company's CEO, Tony Xu:
The students concluded by outlining bear case, base case, and bull case scenarios, with 2029 share price targets of $100, $318, and $467, respectively. That's compared with yesterday's closing price of $157.33:
Bill, the other judges, and I were unanimous that this was the most well-researched presentation – and the best stock idea. Again, you can review the entire presentation here.
Tomorrow, I'll take a look at DoorDash using my standard framework – analyzing its historical and current financials, its recent earnings report, and valuation. Stay tuned!
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.
P.P.S. Greetings from Ireland – the 87th country I've visited. My wife Susan and I flew overnight to Dublin on Sunday. Yesterday, we toured the infamous Kilmainham Gaol, visited the ancient Clonmacnoise monastery, did a three-mile hike along the River Shannon, and ended the day on the other side of the country in Galway. Here are some pictures:
