This Magnificent Stock Is Up 370% From Its 2022 Low -- 2 Reasons to Buy It Now, and 1 Reason to Steer Clear

Core Viewpoint - DoorDash has experienced significant stock growth and revenue increases, but caution is advised due to high valuation compared to competitors like Uber Group 1: Revenue Growth - DoorDash achieved a record revenue of $3 billion in Q1 2025, marking a 21% increase year-over-year [3] - The gross order value (GOV) reached a record high of $23.1 billion in Q1, up 20% year-over-year [4] - The net revenue margin improved to 13.1%, close to its record high of 13.5%, indicating increased efficiency or higher take rates [5] Group 2: Profitability - Operating costs increased by 11.7% year-over-year to nearly $2.9 billion, but revenue growth of 21% led to a net income of $193 million, a significant improvement from a $23 million loss in the previous year [9] - DoorDash has generated over $2 billion in adjusted EBITDA over the last four quarters, highlighting strong cash generation capabilities [11] - The shift in focus from customer acquisition to profitability reflects DoorDash's secure market position with over 60% market share in the U.S. [10] Group 3: Acquisitions - DoorDash announced a $3.8 billion acquisition of Deliveroo and a $1.2 billion acquisition of SevenRooms, aiming to enhance service offerings and operational efficiency [6][7] - Previous acquisitions, such as Wolt, have facilitated DoorDash's international expansion [7] Group 4: Valuation Concerns - DoorDash's price-to-sales (P/S) ratio is currently 7.9, near a three-year high, making it more expensive than Uber's P/S of 4.3 [14] - Despite leading in the U.S. food delivery market, DoorDash's valuation may not be justified given Uber's broader diversification and higher revenue generation [16][17] - Short-term investors may find limited upside potential, while long-term investors could benefit if the company grows into its valuation over five years [18]