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DASH's Total Orders Growth Momentum Continues: A Sign of More Upside?
ZACKSยท 2025-08-19 18:40
Core Insights - DoorDash (DASH) is experiencing significant growth, with total orders increasing by 20% year-over-year to 761 million in Q2 2025, surpassing the Zacks Consensus Estimate by 1.36% [1][10] Group 1: Growth Drivers - The company's diversification into grocery, retail, and convenience sectors has been a major contributor to the increase in total orders, with these categories growing faster than the core restaurant business [2] - Growth in total orders is also attributed to an increase in monthly active users and the expansion of membership programs like DashPass and Wolt+, leading to record-high average order frequency in Q2 2025 [3][10] - Internationally, total orders grew at a faster pace than in the U.S., indicating the success of DoorDash's global expansion strategy, with new Wolt+ members further boosting order frequency [4] Group 2: Competitive Landscape - DoorDash faces rising competition from local food delivery platforms such as Uber Technologies (UBER) and Grubhub (JTKWY), which are seeking new ways to differentiate themselves and expand market presence [5] - Grubhub has partnered with Wyndham Hotels & Resorts to offer $0 delivery fees and other perks, enhancing its competitive position [6] - Uber Technologies is leveraging its delivery business by partnering with Five Below, allowing customers to order from over 1,500 stores via the Uber Eats app [7] Group 3: Financial Performance and Valuation - DoorDash's shares have increased by 51.1% year-to-date, outperforming the Zacks Internet-Services industry's growth of 9.1% and the broader Zacks Computer & Technology sector's growth of 13.8% [8] - The company is currently considered overvalued, with a Value Score of F and a forward 12-month Price/Sales ratio of 7.30, higher than its median of 5.87 and the industry's 5.49 [12] - The Zacks Consensus Estimate for DoorDash's earnings in 2025 is $2.39 per share, reflecting a 10.6% increase over the past 30 days and a year-over-year increase of 724.14% [14]