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Should You Buy, Sell or Hold DoorDash Stock at P/S of 5.94X?
DASHDoorDash(DASH) ZACKS·2025-03-18 17:55

Company Overview - DoorDash (DASH) shares are currently considered overvalued with a Value Score of F, trading at a forward 12-month Price/Sales ratio of 5.94, above its median of 5.12 and the industry's 4.75 [1] - Despite this, DoorDash's shares have increased by 13.2% year-to-date, outperforming the Zacks Internet - Services industry's decline of 11.3% and the broader Zacks Computer & Technology sector's decline of 8.2% [1] Growth Drivers - The company's outperformance is attributed to strong order growth, with a year-over-year increase of 19% in Q4 2024, totaling 685 million orders, and a 21% increase in Marketplace Gross Order Value (GOV), reaching 21.3billion[3][4]−DoorDash′sexpandingpartnerbase,includingcollaborationswithIbotta,WalmartCanada,Wegmans,Lyft,WarnerBros.Discovery′sMax,andJPMorganChase,hassignificantlybroadeneditsreachandserviceofferings[4][5]StrategicPartnerships−ThepartnershipwithIbottaintegratesdigitalpromotionsintoDoorDash′splatform,providingpersonalizedsavingsandenhancingopportunitiesforconsumerpackagedgoods(CPG)brands[5]−CollaborationwithWalmartCanadaallowsaccesstogroceryandgeneralmerchandisefromover300WalmartSupercenters,strengtheningDoorDash′sgrocerydeliverypresence[7]−ThepartnershipwithHomeDepotenableson−demanddeliveryofhomeimprovementessentials,enhancingconvenienceforcustomersandprofessionals[9]FinancialOutlook−TheZacksConsensusEstimateforDoorDash′searningsin2025is21.3 billion [3][4] - DoorDash's expanding partner base, including collaborations with Ibotta, Walmart Canada, Wegmans, Lyft, Warner Bros. Discovery's Max, and JPMorgan Chase, has significantly broadened its reach and service offerings [4][5] Strategic Partnerships - The partnership with Ibotta integrates digital promotions into DoorDash's platform, providing personalized savings and enhancing opportunities for consumer packaged goods (CPG) brands [5] - Collaboration with Walmart Canada allows access to grocery and general merchandise from over 300 Walmart Supercenters, strengthening DoorDash's grocery delivery presence [7] - The partnership with Home Depot enables on-demand delivery of home improvement essentials, enhancing convenience for customers and professionals [9] Financial Outlook - The Zacks Consensus Estimate for DoorDash's earnings in 2025 is 2.23 per share, reflecting a 2.2% increase over the past 30 days and a year-over-year increase of 668.97% [10] - Revenue estimates for 2025 are pegged at 12.95billion,indicatinga20.7912.95 billion, indicating a 20.79% increase from the estimated 10.72 billion in 2024 [11] Competitive Landscape - DoorDash faces rising competition in the local food delivery logistics segment, particularly from platforms like Uber Eats and Grubhub [12][13] - Grubhub's recent partnership with Walgreens to add on-demand delivery of 15,000 items enhances its competitive edge, highlighting the fragmented nature of the market [14]