I own DoorDash and am recommending buying it at $135 for a 3-5 year long term investment.
Positives
- DoorDash has a large moat with 65% of the US restaurant delivery market.
- Its virtuous network bringing users and restaurant owners together creates a barrier to entry.
- DASH is expanding margins and generating a lot of cash.
- It is a bargain with forecasted 45% adjusted earnings growth for the next three years.
- Partnerships, such as the CVS and Best Buy partnerships, to fuel growth in new verticals.
- Higher, stickier, and profitable growth from loyal MAUs and Dash Pass users.
- Adjusted EPS growth of 45%, brings the PEG (Price Earnings to Growth) down to 1.2, astounding for a market leader with a moat in a growth industry.
Weaknesses and risks
The promiscuous customers and restaurants, who are not beholden to one app and will always look for better pricing options.
The grocery delivery market competition is fierce, with Instacart's 73% market share having its own virtuous network.
