See our analysis DoorDash Valuation : Expensive Or Cheap? for more details on DoorDash’s valuation. We value the stock at $130 per share, about 9x forward revenues. As the restaurant industry, which DoorDash works with, is inherently low margin, customers will ultimately have to bear the impact of higher fees to drive profits. DoorDash’s biggest cost is related to its delivery partners and this number is variable, rising in proportion with the number of orders, giving the company little leverage. This makes us concerned about DoorDash’s unit economics. Moreover, DoorDash has not been able to turn a profit despite posting big growth over the past year and its loss over Q2 2021 was also larger than expected. Sure, DoorDash’s has posted breakneck revenue growth recently, with sales rising 3x last year and projected to rise over 45% this year, but growth rates will slow considerably in 2022. The stock trades at a whopping 15x forward revenue, almost like a software-type business that has thicker margins and more operating leverage. That said, despite the optimism, we think DoorDash stock is considerably overvalued at its current market price of $206 per share.

Moreover, the company also posted stronger than expected revenues over Q2 2021 with sales rising 83% year-over-year to about $1.2 billion, despite the relaxation of some Covid-19 guidelines over the quarter, giving investors some confidence that demand could hold up reasonably well even post Covid. Firstly, the surge in Covid-19 cases in the U.S., caused by the highly infectious Delta variant of the virus, will likely delay return to office plans and this could also bode well for stay-at-home stocks such as DoorDash. The recent rally was driven by a couple of factors. The stock is also up by about 50% year-to-date. Santiago/Getty Images) Getty ImagesĭoorDash stock (NYSE: DASH) has rallied by almost 10% over the last month, significantly outperforming the S&P 500 which declined about 1% over the same period. in the Flatbush neighborhood of Brooklyn on Decemin New York City. NEW YORK, NEW YORK - DECEMBER 04: A Doordash sticker is seen on a window at Mallenche Mexican Grill.

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