DoorDash Surges 74% Year to Date: Should Investors Buy the Stock?

Core Insights - DoorDash's shares have increased by 74.4% year-to-date, outperforming the Zacks Internet - Services industry's growth of 25.5% and the broader Zacks Computer & Technology sector's increase of 27.8% [1] - The company's strong stock performance is attributed to robust total orders, Marketplace Gross Order Value (GOV), improved logistics efficiency, and increased advertising contributions [1] Group 1: Growth Metrics - DoorDash's order volume saw a year-over-year increase of 18% in Q3 2024, reaching a total of 643 million orders [2] - Marketplace GOV experienced a 19% growth, totaling $20 billion [2] - For Q4, DoorDash anticipates Marketplace GOV to be between $20.6 billion and $21 billion, with revenue estimates of $2.83 billion, indicating a year-over-year growth of 22.77% [9] Group 2: Strategic Partnerships - DoorDash has expanded its clientele, including partnerships with Wegmans Food Markets, Warner Bros. Discovery's streaming service Max, JPMorgan Chase & Co., and Lyft, enhancing its service offerings and market reach [3][4][5][6] - The partnership with Warner Bros. Discovery allows DashPass Annual Plan members to access Max With Ads at no additional cost, likely attracting more subscribers [4] - The collaboration with JPMorgan Chase offers extended DashPass benefits, including monthly promos for cardholders [5] Group 3: Product Expansion - In September, DoorDash introduced the DoorDash Commerce Platform to assist merchants in managing their businesses both in-store and online, contributing to growth [7] - The expanding portfolio and partnerships are significant growth drivers for DoorDash, enhancing its market position [12] Group 4: Financial Outlook - The Zacks Consensus Estimate for earnings in Q4 is pegged at 32 cents per share, reflecting a 68% increase in the past 30 days and a year-over-year increase of 182.05% [9] - DoorDash's current Price/Book ratio is 9.45X, higher than the Zacks Internet - Services industry's 5.85X, indicating a stretched valuation [11]