![]() I have no business relationship with any company whose stock is mentioned in this article. I am not receiving compensation for it (other than from Seeking Alpha). I wrote this article myself, and it expresses my own opinions. This investment thesis is priced for DASH being a top tier operator with a solid secular growth story - the price does not yet reflect anything short of that.Īnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. It is highly possible that competitors like Uber ( UBER) eat into forward growth rates which may negatively impact my long term margin assumptions.Īnother risk is valuation - if my 30x 2031x earnings assumption proves too aggressive, then the projected annual return would decline. That suggests 650% upside from current levels over the next 9.5 years, representing over 22% potential annualized upside. I could see the stock trading at 30x 2031 earnings as the company would be benefiting from operating leverage at that point. That would place the stock at just 4x projected 2031 earnings power. I assume the company will generate a 60% net margin based on contribution profits over the long term. I could see the contribution margin expanding to 42% of revenues over time. But as any user of DASH can confirm, the company has been very generous in its promotions and handling of customer complaints.Īs the company gains more scale, it should be able to both improve its business performance as well as gain leverage on the consumer. After deducting cost of revenue and sales & marketing, the contribution margin has stood around 22% in recent quarters. Yet even based on these estimates, the stock looks very buyable here. As the company makes headway into delivering more categories of items, I could see these estimates proving conservative. I note that consensus estimates have come down significantly since my last report - previously analysts were looking for $33 billion of revenues by 2031. Wall Street expects revenue growth to come faster at 25% and slowly decelerate over the coming decade. That suggests a 20.8% GOV growth rate in the second half of the year, representing some sequential acceleration and consistent with guidance from other pandemic winners. Among other things, this strategy has driven the addition and growth of the convenience, grocery, alcohol, gifts, flowers, retail, and pet categories, our entrance into new countries, the launch of our Drive white label logistics service and Storefront online ordering solution, and the development of our ads platform.ĭASH has guided for 19% GOV growth in the next quarter and 21% GOV growth for the full year. Restaurant Marketplace back into our business in order to build a more holistic platform for local commerce. Our strategy is to invest cash generated by our U.S. In its shareholder letter, the management team stated the following: DASH Stock OutlookĭASH is most well known as a food delivery company, but it is aggressively moving beyond just connecting restaurants to consumers. The company ended the quarter with $3.7 billion of cash & investments, making up more than 16% of the market cap. But the fact that the company is operating at a positive adjusted EBITDA run-rate is important when analyzing the financial solvency position of the company, as this company is cash flow positive. ![]() Regarding that last note, DASH is still not yet profitable on a GAAP basis with stock-based compensation being still quite significant. ![]() The company generated yet another quarter with adjusted EBITDA profits. ![]() Revenue grew 35%, faster than GOV growth of 25% because of lower Dasher incentives and promotions. DASH Stock Key MetricsĪs expected, DASH saw continued deceleration in growth as the company lapped tough comparables. The declining stock price has only improved the value proposition. I last covered DASH in February, when I called the stock a buy on account of the long growth runway. The stock was most recently trading just over $60 per share. DASH Stock PriceĭASH priced its IPO at $102 per share in late 2020 and peaked above $240 per share. If you believe in a world of "delivery on demand," then DASH may be a stock for you. DASH continues to penetrate a large market, presenting it with a long growth runway ahead of it. There is no indication that DASH can return to pandemic-level growth rates, but at these prices, the stock can deliver stellar returns even assuming far more modest growth. ![]() There is a saying that periods of irrational optimism are followed by periods of irrational pessimism. ( NYSE: DASH), which has seen its stock price destroyed in just several months' time. Just look at what that did to the stock price of DoorDash, Inc. It isn't easy transitioning down from triple digit growth. Hapabapa/iStock Editorial via Getty Images ![]()
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