At the end of February, Lululemon NASDAQ: LULU, DoorDash NASDAQ: DASH, and Ulta Beauty NASDAQ: ULTA were among the Most Upgraded Stocks tracked by MarketBeat. Investors should pay attention to this because the sentiment trends drive these markets and lead them to fresh highs likely set early this year. The critical takeaway is that these quality consumer-focused businesses are growing, have momentum at the start of the calendar year, and their share prices are on track to rise by 25% or more before the year ...

Core Points - DoorDash will pay a $16.7 million settlement due to misleading tipping practices between 2017 and 2019 [1][2] - The New York Attorney General's office found that DoorDash used customer tips to subsidize the wages of delivery workers, known as "Dashers," rather than providing them with the full tips earned [1][3][4] - The settlement aims to return millions to Dashers and ensure transparency in DoorDash's payment practices moving forward [2] Company Practices - Between May 2017 and September 2019, DoorDash employed a guaranteed pay model that allowed Dashers to see their pay before accepting deliveries [3] - Under this model, tips were used to offset the base pay promised to Dashers, meaning they only saw tips if they exceeded the guaranteed amount [4] - DoorDash guaranteed a minimum payment of $1 to Dashers, using customer tips to cover the rest of the guaranteed pay [4] Industry Context - Research indicates that consumers are becoming more cautious about tipping, with 29% feeling that tipping has become excessive [5][6] - The settlement follows a lawsuit from Uber, which accuses DoorDash of coercing restaurants into exclusive partnerships, a claim DoorDash denies [6]

Core Points - DoorDash will pay nearly $17 million in a settlement for using customer tips to subsidize delivery workers' wages instead of allowing them to keep the full tips [1][5] - The New York Attorney General criticized DoorDash's practices as fundamentally unfair, stating that customers were misled about how their tips were used [1][7] - The settlement includes $16.75 million in restitution for eligible DoorDash workers who made deliveries between May 2017 and September 2019 in New York [5][7] Payment Model - Under the previous pay model, DoorDash guaranteed a minimum payment to delivery workers but used customer tips to offset this guaranteed amount [2][4] - For example, if a customer tipped $11 on an order with a guaranteed amount of $10, the Dasher would only receive $12 instead of the full tip [4] - This model has since been discontinued, and DoorDash is now required to ensure that tips are paid in full to Dashers without affecting the company's guaranteed pay contributions [8][7] Settlement Details - The settlement will distribute restitution to affected workers, and DoorDash will also cover up to $1 million in settlement administration costs [5][7] - DoorDash must disclose its pay policy details to both Dashers and customers moving forward to ensure transparency [7]

Core Points - DoorDash will pay a $16.75 million settlement to resolve a probe into its tipping practices, affecting approximately 60,000 delivery workers, known as "Dashers," with individual payouts ranging from $10,000 to $14,000 [1][5] - The investigation revealed that DoorDash used customer tips to offset the wages paid to Dashers, misleading both customers and workers about the true nature of the tipping system [2][3][5] - The settlement mandates that DoorDash must cease its tip-sharing practice and improve transparency regarding how tips are handled, with compliance reports required every six months for the next three years [4] Summary by Sections Settlement Details - The total settlement amount is $16.75 million, which will be distributed among around 60,000 Dashers, resulting in payouts between $10,000 and $14,000 per worker [1][5] Tipping Practices - DoorDash's practice involved using tips to reduce the company's financial responsibility for paying Dashers, which was not disclosed to either the Dashers or the customers [2][3] - An example highlighted by New York Attorney General Letitia James illustrated that if a Dasher was guaranteed $10 for a delivery and received a $3 tip, DoorDash would only pay $7, effectively using the tip to lower its own costs [2] Company Accountability - Communications among DoorDash executives indicated awareness of the deceptive nature of their tipping policy, with concerns that Dashers might eventually discover the truth [3][4] - The settlement requires DoorDash to establish a website for Dashers to claim their settlement funds and to report on compliance with the new transparency requirements [4]

Group 1 - DoorDash, Inc. (DASH) is currently ranked 6 in the Zacks Sector Rank within the Computer and Technology group, which consists of 607 companies [2] - The Zacks Rank system indicates that DoorDash has a Zacks Rank of 2 (Buy), with a 14.5% increase in the consensus earnings estimate for the full year over the past 90 days, reflecting improved analyst sentiment [3] - Year-to-date, DoorDash has returned approximately 19.2%, significantly outperforming the average loss of 0.7% in the Computer and Technology group [4] Group 2 - DoorDash belongs to the Internet - Services industry, which includes 34 stocks and is currently ranked 80 in the Zacks Industry Rank, while this industry has seen a loss of about 3.5% this year [5] - In comparison, Appian (APPN), another stock in the Computer and Technology sector, has a year-to-date return of 1.1% and belongs to the Internet - Software industry, which is ranked 83 and has moved -0.9% this year [4][6] - Investors should continue to monitor both DoorDash and Appian for their potential to maintain solid performance in the sector [6]

Core Viewpoint - DoorDash, Inc. (DASH) shows a significantly improving earnings outlook, making it a solid choice for investors as analysts continue to raise their earnings estimates for the company [1][2]. Current-Quarter Estimate Revisions - The earnings estimate for the current quarter is $0.39 per share, reflecting a remarkable change of +750% from the same period last year [4]. - Over the last 30 days, eight estimates have been revised upward while two have gone lower, resulting in a 5.66% increase in the Zacks Consensus Estimate [4]. Current-Year Estimate Revisions - For the full year, the earnings estimate stands at $2.22 per share, indicating a change of +665.52% from the previous year [5]. - The trend for the current year is also positive, with eight estimates moving higher compared to three negative revisions, leading to an 11.02% increase in the consensus estimate [5]. Favorable Zacks Rank - The positive estimate revisions have earned DoorDash a Zacks Rank 2 (Buy), indicating strong potential for outperformance [6]. - Research indicates that stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500 [6]. Bottom Line - Investors have shown confidence in DoorDash, evidenced by a 20% stock gain over the past four weeks, driven by solid estimate revisions and promising earnings growth prospects [7].

Financial Performance - The company achieved a net income of $123 million in 2024, following a net loss of $558 million in 2023, with an accumulated deficit of $5.3 billion as of December 31, 2024[54]. - The company has a history of net losses since its founding in 2013, raising concerns about its ability to maintain consistent profitability[54]. - The company expects fluctuations in quarterly and annual results due to various factors, including competition and market expansion efforts[72]. - The company has experienced impairments of $312 million and $101 million in non-marketable equity securities during the quarters ended December 31, 2022, and December 31, 2023, respectively[84]. - The company may incur losses from various types of fraud, including the use of stolen credit card information and account takeovers[119]. - The company is subject to limitations on the utilization of net operating loss (NOL) carryforwards, which can offset only 80% of federal taxable income[187]. Market Competition - Revenue growth rates have fluctuated historically and may continue to decline as the company faces increased competition and market saturation[58]. - The company operates in a highly competitive environment, facing challenges from established players like Uber Eats and local delivery services, which may impact its market share and profitability[59]. - The company’s ability to attract and retain merchants, consumers, and Dashers is sensitive to competitive pressures and local market dynamics[92][94]. - The company faces risks from competitors potentially introducing superior autonomous and drone delivery technologies, which could adversely affect its business and financial condition[125]. Operational Challenges - The company anticipates increasing expenses in the future due to significant investments in platform development, market expansion, and technology integration[54]. - The company may face challenges in retaining existing merchants and consumers, which could adversely affect revenue growth and margins[66]. - The company faces challenges in international expansion, including compliance with various laws and regulations, economic volatility, and geopolitical risks, particularly in jurisdictions near Russia[90]. - The company may face increased operational complexities and financial reporting requirements as it expands internationally, which could affect its financial condition[92]. - The company is investing significantly to enhance platform availability and accommodate increasing user traffic, which is critical for maintaining user engagement[150]. Technology and Cybersecurity - The company has experienced cybersecurity incidents in the past and anticipates future attacks, which could adversely affect its operations and financial condition[108]. - The company has implemented measures to monitor and protect its systems, but these may not fully prevent unauthorized access or breaches[111]. - The company maintains cybersecurity insurance, but there is uncertainty regarding its adequacy for potential liabilities from breaches[113]. - The company is incorporating artificial intelligence into its operations, which presents risks related to legal liability, data security, and competitive positioning[152]. Regulatory and Legal Risks - The classification of Dashers as independent contractors is under legal scrutiny, with potential reclassification posing significant operational and financial risks[158]. - The company is involved in ongoing legal proceedings regarding Dasher classification, which could result in financial liabilities and operational changes[161]. - Regulatory scrutiny has increased, particularly regarding worker classification and Dasher pay, which may lead to higher operational costs and legal claims[188]. - The company faces potential penalties and operational restrictions due to compliance with evolving laws governing the sale and delivery of highly regulated products, such as alcoholic beverages[189]. Strategic Initiatives - The company aims to expand its consumer base and convert promotional users to paid memberships, which is essential for revenue growth[69]. - The company has launched new pricing strategies and loyalty programs, such as DashPass and Wolt+, to attract and retain users, but their effectiveness remains uncertain[94]. - Significant investments have been made in self-operated businesses like DashMart and Wolt Market, but there is no assurance of realizing anticipated benefits, and operational challenges may arise[129]. Human Resources and Culture - Attracting and retaining highly skilled employees is critical for growth, and failure to do so could adversely affect the company's operations and financial condition[141]. - The company culture is vital for success, and challenges in maintaining it as the organization grows could negatively impact business performance[143]. Financial Structure and Capital - The company may require additional capital for growth, and future financing may not be available on favorable terms, potentially impacting operations[240][242]. - The revolving credit facility includes covenants that may limit operational flexibility and affect future financing capabilities[243]. - The multi-class stock structure concentrates voting power with co-founders, limiting stockholder influence on corporate matters[245]. Consumer Behavior and Market Trends - Seasonal fluctuations in consumer spending and Dasher availability can significantly impact financial results, making it difficult to forecast operations accurately[135]. - Economic conditions, including inflation and labor shortages, may adversely affect consumer spending and merchant operations, impacting the company's volume and financial results[136]. - The on-demand local commerce category has grown rapidly since the company's platform launch in 2013, but future growth is uncertain, particularly in convenience and grocery services[114].

Core Insights - DoorDash (DASH) shares have increased by 3.9% following the release of its fourth-quarter 2024 results, driven by higher Marketplace Gross Order Value (GOV) and growth in advertising revenues [1][4] - Over the past 12 months, DASH shares have surged 70.1%, outperforming the Zacks Internet - Services industry's return of 25.7% and the broader Zacks Computer & Technology sector's appreciation of 23.6% [1][4] Financial Performance - The company reported a year-over-year increase of 19% in total orders for Q4 2024, reaching 685 million orders [4] - Marketplace GOV grew by 21%, totaling $21.3 billion, indicating strong demand across platforms [4] - The Zacks Consensus Estimate for 2025 earnings is $1.94 per share, reflecting a year-over-year increase of 568.97% despite a 2% decline over the past 30 days [12] - The estimated revenue for 2025 is $12.73 billion, suggesting an 18.74% increase from 2024's estimated figure of $10.72 billion [13] Strategic Partnerships and Expansion - DoorDash has expanded its offerings beyond restaurants, launching a commerce platform and enhancing its grocery delivery services [5] - A partnership with The Home Depot allows for on-demand delivery of home improvement essentials, with delivery in as little as one hour [6] - Collaborations with various partners, including Ibotta, Walmart Canada, Wegmans Food Markets, and Lyft, have broadened DoorDash's reach and service offerings [7][9][10][11] - The integration of Ibotta's digital promotions into DoorDash's platform provides personalized savings for customers and enhanced opportunities for CPG brands [8] Valuation and Investment Potential - Despite strong growth prospects, DoorDash stock is considered overvalued, with a Price/Book ratio of 11.03 compared to the industry average of 5.96 [14] - The company holds a Zacks Rank 2 (Buy) and a Growth Score of A, indicating a favorable investment opportunity [15]

Core Insights - DoorDash (DASH) reported earnings of 33 cents per share in Q4 2024, a significant improvement from a loss of 39 cents in the same quarter last year, although it missed the Zacks Consensus Estimate by 2.94% [1] - Revenue increased by 24.8% year over year to $2.87 billion, surpassing the consensus mark by 1.34%, driven by higher Marketplace Gross Order Value (GOV) and growth in advertising revenues [2] - Following the earnings report, DoorDash shares rose by 5.75% in after-hours trading to $204.20, likely due to strong revenue growth and performance in total orders and Marketplace GOV [2] Financial Performance - Total orders in Q4 increased by 19% year over year to 685 million, beating the Zacks Consensus Estimate by 1.50% [3] - Marketplace GOV rose by 21% year over year to $21.3 billion, exceeding the consensus estimate by 1.67% [3] - Adjusted gross profit reached $1,472 million, up 31.8% from the previous year, with an adjusted gross margin expanding by 270 basis points to 51.2% [3] - The contribution margin improved to 33.7% compared to 29.9% in the year-ago quarter [3] Expenses and Profitability - Adjusted sales and marketing expenses increased by 17.8% year over year to $504 million [4] - Adjusted research and development expenses rose by 25.8% year over year to $166 million [4] - Adjusted general and administrative expenses increased by 21.6% from the previous year to $236 million [4] - Adjusted EBITDA was $566 million, compared to $363 million in the year-ago quarter, with an adjusted EBITDA margin expanding by 390 basis points to 19.7% [4] Balance Sheet and Cash Flow - As of December 31, 2024, DoorDash had $5.34 billion in cash and cash equivalents, an increase from $4.96 billion as of September 30, 2024 [5] - Cash flow from operations was $518 million in Q4, slightly down from $531 million in the previous quarter [5] - Free cash flow was $420 million, lower than the previous quarter's $444 million [5] Future Guidance - For Q1 2025, DoorDash anticipates Marketplace GOV to be between $22.6 billion and $23 billion [6] - Adjusted EBITDA is expected to be in the range of $550 million to $600 million [6] Market Position - DoorDash currently holds a Zacks Rank 2 (Buy) [7] - Other notable stocks in the sector include KT (Rank 1), BWX Technologies, and Innodata (both Rank 2) [7][8]

Shares of DoorDash Inc DASH were climbing in early trading on Wednesday, after the company reported solid fourth-quarter results.Here are some key analyst takeaways. Check out other analyst stock ratings.Needham: DoorDash's gross order value (GOV) grew 20.6% year-on-year, accelerating after two straight quarters of deceleration. The company also "capped off a third straight year of growing GOV >20% post pandemic," McTernan said. The company continues to pursue opportunities to expand its reach and frequency ...