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DoorDash Rallies 44% YTD: Should You Buy, Retain or Sell the Stock?
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DoorDash‘s (DASH - Free Report) shares have surged 43.7% in the year-to-date period compared with the Zacks Internet - Services industry’s growth of 18% and the broader Zacks Computer & Technology sector’s appreciation of 23.4%.
The outperformance can be attributed to strong performance in total orders and Marketplace Gross Order Value (GOV), alongside enhanced logistics efficiency and an increased contribution from advertising.
DoorDash is also gaining momentum in new verticals, particularly in the grocery segment, which further strengthens its growth potential.
Can Expanding Clientele Boost DASH Stock?
DASH is benefiting from an expanding clientele that enhanced its order volume and registered a year-over-year increase of 19% in the second quarter of 2024. The metric reached a total of 635 million orders. The marketplace gross order value (GOV) also experienced robust 20% growth, totaling $19.7 billion.
The company’s expanding clientele, which includes the likes of 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) , have acted as catalysts for growth, significantly broadening DoorDash’s reach and enhancing its service offerings.
In August, DASH announced a partnership with Warner Bros. Discovery’s streaming service, Max, allowing DashPass Annual Plan members to access Max With Ads at no additional cost, enhancing its streaming and food delivery experience. This approach is likely to attract more subscribers, further boosting DoorDash’s order volume.
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.
DoorDash partnered with Academy Sports + Outdoors to offer same-day delivery from Academy’s 285 stores, capitalizing on the Back-to-School season and providing enhanced convenience for shoppers.
Expanding portfolio has been noteworthy. In September, the company introduced a suite of new products, including the DoorDash Commerce Platform, to help merchants grow and manage businesses on its channels, both in-store and online.
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 to be 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 22.99% year-over-year growth.
The Zacks Consensus Estimate for earnings is pegged at 20 cents per share, which increased a penny in the past 30 days.
What Should Investors Do With DASH Stock?
Despite a strong portfolio and an expanding partner base, the company faces intense competition in the largest category of its business, the local food delivery logistics, which has been a headwind.
DASH’s stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of Price/Book ratio, DASH is trading at 8.16X, higher than the Zacks Internet - Services industry’s 5.77X.
Image: Bigstock
DoorDash Rallies 44% YTD: Should You Buy, Retain or Sell the Stock?
DoorDash‘s (DASH - Free Report) shares have surged 43.7% in the year-to-date period compared with the Zacks Internet - Services industry’s growth of 18% and the broader Zacks Computer & Technology sector’s appreciation of 23.4%.
The outperformance can be attributed to strong performance in total orders and Marketplace Gross Order Value (GOV), alongside enhanced logistics efficiency and an increased contribution from advertising.
DoorDash is also gaining momentum in new verticals, particularly in the grocery segment, which further strengthens its growth potential.
Can Expanding Clientele Boost DASH Stock?
DASH is benefiting from an expanding clientele that enhanced its order volume and registered a year-over-year increase of 19% in the second quarter of 2024. The metric reached a total of 635 million orders. The marketplace gross order value (GOV) also experienced robust 20% growth, totaling $19.7 billion.
DoorDash, Inc. Price and Consensus
DoorDash, Inc. price-consensus-chart | DoorDash, Inc. Quote
The company’s expanding clientele, which includes the likes of 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) , have acted as catalysts for growth, significantly broadening DoorDash’s reach and enhancing its service offerings.
In August, DASH announced a partnership with Warner Bros. Discovery’s streaming service, Max, allowing DashPass Annual Plan members to access Max With Ads at no additional cost, enhancing its streaming and food delivery experience. This approach is likely to attract more subscribers, further boosting DoorDash’s order volume.
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.
DoorDash partnered with Academy Sports + Outdoors to offer same-day delivery from Academy’s 285 stores, capitalizing on the Back-to-School season and providing enhanced convenience for shoppers.
Expanding portfolio has been noteworthy. In September, the company introduced a suite of new products, including the DoorDash Commerce Platform, to help merchants grow and manage businesses on its channels, both in-store and online.
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 to be 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 22.99% year-over-year growth.
The Zacks Consensus Estimate for earnings is pegged at 20 cents per share, which increased a penny in the past 30 days.
What Should Investors Do With DASH Stock?
Despite a strong portfolio and an expanding partner base, the company faces intense competition in the largest category of its business, the local food delivery logistics, which has been a headwind.
DASH’s stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of Price/Book ratio, DASH is trading at 8.16X, higher than the Zacks Internet - Services industry’s 5.77X.
DASH currently carries Zacks Rank #3 (Hold), suggesting that it might be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.