Analyzing DoorDash through my 'first look' lens
In yesterday's e-mail, I shared the 79-slide presentation on food-delivery service DoorDash (DASH) made by a team of three Columbia Business School students. The pitch won the $100,000 first prize at the 18th annual Pershing Square Challenge two weeks ago.
It's an excellent stock idea. So today, let's take a look at the company's historical and current financials, as well as its valuation...
DoorDash's stock has been on a wild ride since it went public on December 9, 2020.
The IPO was priced at $102 per share, and the stock closed up 86% on the day at $189.51. It soon soared to around $235 in 2021, crashed below $50 during the 2022 tech bust, and rallied more than 5 times to an all-time high of $285.50 last October.
Since then, it has tumbled 46% to close yesterday at $155.19, as you can see in this chart:
The company's income statement shows a much more consistent story...
Revenues have risen steadily every quarter. Net income turned positive in the third quarter of 2024 and has remained positive since then (though it has declined the past three quarters, which is a major reason why the stock has sold off):
Turning to the cash-flow statement, DoorDash benefits from minimal capital expenditures ("capex"). It turned free-cash-flow ("FCF") positive in the second quarter of 2020, though it has roughly flatlined over the past two years:
The company maintains a strong balance sheet with plenty of excess cash, which surged from $1 billion to more than $4 billion thanks to the proceeds from the IPO. But then it pulled back to around $2 billion thanks to three acquisitions in 2025:
Lastly, DoorDash's diluted share count spiked during the IPO and rose quickly for four years thereafter due to stock options given to employees. But it has slowed in the past year, which is good to see:
In summary, DoorDash's financials are strong. It has a healthy balance sheet, is now consistently profitable, and generates more than $2 billion of FCF annually.
Revenues have grown rapidly and steadily, such that the company has 62.7% market share – dwarfing its primary competitors, Uber Eats and Grubhub, as you can see in this chart from page 27 of the winners' presentation:
Turning to valuation...
The company has a $68.6 billion market cap and, subtracting $2.2 billion of net cash, an enterprise value of $66.4 billion.
Analysts expect the company to earn $2.58 per share this year. At yesterday's close price of $155.19, that means the stock is trading at a rich 60.2 times earnings.
However, analysts expect earnings to soar to $4.38 per share next year, which would make the forward 2027 price-to-earnings ratio a more reasonable 35.4 times.
I don't think that's an unreasonable multiple for a market-leading company with strong growth opportunities ahead of it all over the world.
At the same time, even though it has almost been cut in half, it's hard to argue that the stock is misunderstood and underappreciated in light of its high multiple.
I'm going to sit on the sidelines for now – but my team and I at Stansberry Research will continue to follow DoorDash.
If we decide to do a deeper dive on the company and its stock, as always, Stansberry's Investment Advisory subscribers will be the first to know. You can become one by clicking here.
And, as always, I welcome your feedback – you can send me an e-mail by clicking here.
Best regards,
Whitney
P.S. In Monday's e-mail, I shared an in-depth discussion between two of my friends about Meta Platforms (META). Friend B, who I identified as a "European investor," subsequently told me it's fine to disclose his name: Nicolas Chantier, founder of N72, an EU MiFID II independent research firm (not an investor). If you wish to contact him, his e-mail address is nicolas.chantier@n72.tech.
P.P.S. During our second day in Ireland, Susan and I walked around Galway and visited its magnificent stone cathedral. Then we drove to the even more magnificent Kylemore Abbey, where we toured the castle, walked through the Victorian Walled Garden, and ended our day with a hike up Diamond Hill. Here are some pictures:
