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DASH’s robust stock price performance has been driven by its better-than-expected financial results and impressive growth profile.
DoorDash reported second-quarter 2024 revenues of $2.63 billion, which increased 23.3% year over year. The upside was driven by strong performance in total orders and Marketplace Gross Order Value (“GOV”), alongside enhanced logistics efficiency and an increased contribution from advertising.
Nevertheless, investors should ask this question — is it the right time to invest in DASH shares? Let’s analyze.
DoorDash’s success is driven by its growing clientele, bolstered by partnerships with Warner Bros. Discovery’s (WBD - Free Report) streaming service Max, JPMorgan Chase & Co.’s (JPM - Free Report) U.S. consumer and commercial banking division Chase and Academy Sports and Outdoors (ASO - Free Report) .
In June, DoorDash and Academy Sports + Outdoors announced an exclusive partnership to offer same-day delivery from Academy’s 285 stores via the DoorDash app, enhancing convenience for shoppers during the Back-to-School season.
In August, DoorDash announced a partnership with Max, Warner Bros. Discovery’s streaming service, offering Max With Ads included with a DashPass Annual Plan membership at no additional cost.
DoorDash also expanded its partnership with JPMorgan Chase & Co.’s U.S. consumer and commercial banking division Chase, offering extended DashPass benefits, including up to $10 off monthly promos for Sapphire cardmembers and new benefits for Freedom and Slate cardholders.
The partnerships are expected to bolster DoorDash’s total orders, which increased 19% year over year to $635 million in the second quarter of 2024. Marketplace GOV experienced a 20% increase year over year, totaling $19.7 billion.
DoorDash’s Positive Q3 Guidance
DoorDash’s strong portfolio and expanding partner base are contributing to its growth prospects continuously, driving top-line growth.
For the third quarter of 2024, it anticipates Marketplace GOV in the range of $19.4-$19.8 billion.
The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $2.66 billion, indicating 22.81% year-over-year growth.
The Zacks Consensus Estimate for earnings is pegged at 19 cents per share, increased by 18.75% in the past 30 days.
What Should Investors Do With DASH Stock?
Despite a strong portfolio and an expanding partner base, DoorDash faces intense competition in the largest category of its business, the local food delivery logistics, which has been a headwind.
In terms of the forward 12-month Price/Sales ratio, DASH is trading at 5.34X, higher than its median of 4.92X and the Zacks Internet - Services sector’s 5.31X, reflecting a stretched valuation.
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DASH Gains 26.4% YTD: Should You Buy, Hold or Sell the Stock?
DoorDash (DASH - Free Report) shares have rallied 26.4% year to date compared with the Zacks Computer & Technology sector’s rise of 20.7%.
DASH’s robust stock price performance has been driven by its better-than-expected financial results and impressive growth profile.
DoorDash reported second-quarter 2024 revenues of $2.63 billion, which increased 23.3% year over year. The upside was driven by strong performance in total orders and Marketplace Gross Order Value (“GOV”), alongside enhanced logistics efficiency and an increased contribution from advertising.
Nevertheless, investors should ask this question — is it the right time to invest in DASH shares? Let’s analyze.
DoorDash, Inc. Price and Consensus
DoorDash, Inc. price-consensus-chart | DoorDash, Inc. Quote
Growing Clientele Boosts DASH Shares’ Surge
DoorDash’s success is driven by its growing clientele, bolstered by partnerships with Warner Bros. Discovery’s (WBD - Free Report) streaming service Max, JPMorgan Chase & Co.’s (JPM - Free Report) U.S. consumer and commercial banking division Chase and Academy Sports and Outdoors (ASO - Free Report) .
In June, DoorDash and Academy Sports + Outdoors announced an exclusive partnership to offer same-day delivery from Academy’s 285 stores via the DoorDash app, enhancing convenience for shoppers during the Back-to-School season.
In August, DoorDash announced a partnership with Max, Warner Bros. Discovery’s streaming service, offering Max With Ads included with a DashPass Annual Plan membership at no additional cost.
DoorDash also expanded its partnership with JPMorgan Chase & Co.’s U.S. consumer and commercial banking division Chase, offering extended DashPass benefits, including up to $10 off monthly promos for Sapphire cardmembers and new benefits for Freedom and Slate cardholders.
The partnerships are expected to bolster DoorDash’s total orders, which increased 19% year over year to $635 million in the second quarter of 2024. Marketplace GOV experienced a 20% increase year over year, totaling $19.7 billion.
DoorDash’s Positive Q3 Guidance
DoorDash’s strong portfolio and expanding partner base are contributing to its growth prospects continuously, driving top-line growth.
For the third quarter of 2024, it anticipates Marketplace GOV in the range of $19.4-$19.8 billion.
The Zacks Consensus Estimate for third-quarter 2024 revenues is pegged at $2.66 billion, indicating 22.81% year-over-year growth.
The Zacks Consensus Estimate for earnings is pegged at 19 cents per share, increased by 18.75% in the past 30 days.
What Should Investors Do With DASH Stock?
Despite a strong portfolio and an expanding partner base, DoorDash faces intense competition in the largest category of its business, the local food delivery logistics, which has been a headwind.
In terms of the forward 12-month Price/Sales ratio, DASH is trading at 5.34X, higher than its median of 4.92X and the Zacks Internet - Services sector’s 5.31X, reflecting a stretched valuation.
Hence, investors should wait for a better entry point for DASH, which currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.