![]() ![]() meal delivery sales in January, was loss-making last year and is only expected to barely break even this year on an adjusted basis. DoorDash, despite being the largest player with about 56% share of U.S. Moreover, longer-term profitability remains a real concern. For perspective, at its current price of $145 per share the company trades at a relatively rich 12x projected 2021 revenues. As this trend becomes visible through the company’s quarterly reports, it’s likely that investors will re-value the stock lower. and the vaccination drive gaining momentum. However, growth is likely to slow to under 30% this year per consensus estimates, as people start venturing back into dine-in restaurants, with Covid-19 cases declining in the U.S. DoorDash was a big beneficiary of the Covid-19 related lockdowns last year, with revenue expanding by over 3x in 2020. So is this a good time to enter DoorDash stock? We don’t think so and believe that the stock has a further downside. See our analysis DoorDash Stock: Expensive Or Cheap? for more details on the company’s valuation.ĭoorDash (NYSE:DASH) stock has declined by about 30% over the past month, driven partly by the broader sell-off in technology and high growth stocks. Considering that there is little to differentiate the major players other than delivering food at the lowest possible price, the long-term outlook for margins also doesn’t look too bright. The company posted a $436 million operating loss last year, despite massive revenue growth. While the company is likely to grow revenue by about 25% over the next two years, it is not clear that the unit economics will work for DoorDash. That said, DoorDash still looks expensive even post the correction, trading at over 11x forward revenues. Now, DoorDash does have an edge over rivals such as UberEats, given its focus on more profitable suburban markets and also due to its well-received DashPass subscription program, which has over 5 million customers. While the app-based food delivery business is certainly here to stay, DoorDash’s fees are relatively high and it is not clear that customers will see as much value in the company’s services post the pandemic. This impacts DoorDash, given the company was one of the biggest beneficiaries of the pandemic, with sales more than tripling last year to $2.9 billion. population has now received one or more doses of a Covid-19 shot, per the Bloomberg vaccine tracker, and as Covid continues to decline and the economy opens up further, people should start returning to sit-down restaurants. The narrative for the stock has clearly changed. So does DoorDash stock look attractive at current levels? We don’t think so. With Covid-19 cases falling and vaccination rates picking up in the U.S., investors are moving out of high-growth tech and “at home” stocks such as DoorDash, to cyclical and value stocks. The company has also restructured its podcasting division and opted not to renew expensive talent deals with some podcast partners, including Meghan Markle and Prince Harry’s audio company, Archewell Audio.DoorDash (NYSE:DASH) stock has declined by almost 40% from its February 2021 highs and remains down by about 6% year-to-date, trading at around $133 per share. But like other tech companies, Spotify has focused on reducing its expenses, including laying off hundreds of workers amid a challenging economic time. Spotify, once known solely as a music streaming company, has expanded its offerings in recent years to include podcasts and audio books. ![]() “The company is going through a major transformation with the price increases on the way, which we view as a smart poker move despite some near-term potential churn,” Ives said. In the U.S., Spotify’s monthly individual premium plan will go up $1 to $10.99 a month. ![]() Spotify on Monday announced plans to raise prices in more than 50 countries. Analysts had expected the company to project $3.78 billion, according to FactSet.ĭaniel Ives, a managing director of equity research at Wedbush Securities, said he thought it was wise for Spotify to issue that guidance in a choppy macroeconomic environment and as the company imposes price hikes. The company said in the third quarter it expects sales to be $3.6 billion. Investors reacted negatively to Spotify’s outlook. ![]()
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