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Can DoorDash and Wegmans Partnership Push the DASH Stock Higher?

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DoorDash (DASH - Free Report) is benefiting from an expanding partner base that includes the likes of Wegmans Food Markets, 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) .

DASH recently announced an expanded partnership with Wegmans Food Markets, enhancing its grocery delivery offerings across Maryland and soon in several states, including Virginia, North Carolina, New Jersey, Delaware and upstate New York. 

The collaboration builds upon the existing partnership between DoorDash and Wegmans Meals 2GO, which provides customers with convenient access to a variety of hot, fresh and restaurant-quality meals delivered directly to their doors. 

To celebrate this partnership, DoorDash is offering customers a limited-time promotion of 40% off eligible orders of $50 or more, making it easier than ever to enjoy the quality and variety Wegmans has to offer.

DASH’s Growing Portfolio and Partnerships Boost Prospects

DoorDash’s shares have surged 44.9% in the year-to-date period compared with the Zacks Computer & Technology sector’s growth of 22.2%. The uptick can be attributed to DASH’s commitment to diversify offerings and strengthen its foothold in the retail sector.

Its expanding clientele enhanced order volume and registered a year-over-year increase of 19% in second-quarter 2024. The metric reached a total of 635 million orders. The marketplace gross order value (GOV) also experienced a robust 20% increase, totaling $19.7 billion.

DoorDash announced a partnership with Max — Warner Bros. Discovery’s streaming service — in August. This partnership allows DashPass Annual Plan members to enjoy Max With Ads at no additional cost, further enhancing the value for subscribers.

To enhance convenience for its customers 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.

DASH 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’s Positive Q3 Guidance

DoorDash’s strong portfolio and expanding partner base are contributing to its growth prospects continuously, driving top-line growth.

For third-quarter 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 22.99% year-over-year growth.

The Zacks Consensus Estimate for earnings is pegged at 20 cents per share, moving up by a penny in the past 30 days.

What Should Investors Do With DASH Stock?

Despite a strong portfolio and an expanding partner base, DASH faces intense competition in the largest category of its business, the local food delivery logistics, which has been a headwind.

DASH stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.

In terms of the Price/Book ratio, DASH is trading at 8.23X, 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.

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