Stock price when the opinion was issued
Last week, they reported a beat on every line item, including 23% revenue growth YOY and total orders 91% YOY, with improved guidance. From the pandemic, people are used to using food delivery apps, given order frequency and customer retention, while digital penetration is growing including their monthly subscription.
They IPO Wednesday and will be the biggest debut this year after Snowflake. They have 390,000 merchants and 18 million customers. They've processed 900 million orders. Food delivery become essential during Covid. Meanwhile, Doordash has bought competitors and the space has actively consolidated. Covid has accelerated it development because of the lockdowns. DD is the biggest player in food delivery, taking 50% market share. There's a lot of room to grow. They are expanding into groceries and flowers. DD is unprofitable given huge marketing costs, but these costs are worth attracting more customers. Revenues grew 204% YOY, total orders by 217% and gross order volume 186%. It's far from profitable, but margins are widening. DASH will be priced at $90-95 at IPO, less than 7x 2021 sales estimates, but he thinks $100 is reasonable, but no more--business will slow a lot next year when society reopens. He predicts a pullback in 2021.