DoorDash, Inc

DASH NYSE
DASH
DoorDash, Inc NYSE
 
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Upcoming Earnings
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History of DASH

Important events

Dec 072021

Dashing down the gig economy

DoorDash breaks its own gig work policy to allow for speedy deliveries to NYC.

  • DoorDash is hiring permanent workers in NYC to try and offer a 15-minute delivery service, with employees getting paid $15/hr (with benefits and everything).
  • It has spent billions of dollars protecting its gig work model in the face of increasing regulatory pressure, and it said outdated employment laws were part of the reason for the change in structure.
  • DoorDash itself has yet to reach profitability, so there’s some doubt that its new venture will make any money given the higher costs associated with speedy delivery.
Rowan Freeman / Unsplash
Jun 302021
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Wells Fargo rings the bell on DoorDash

DoorDash jumps nearly 5% after Wells Fargo raises its price target to $215.

Leading food delivery app DoorDash gets a bit of analyst love from Brian Fitzgerald of Wells Fargo, who thinks that new revenue drivers are worth upgrading his price target from $170 to $215. The upgrade is thanks to the delivery apps focus on new geographies and verticals, and it’s also worth noting that short interest on the stock has fallen.

DoorDash only recently went public, opening at $182 in its debut on December 20, and has been on a bumpy ride since then as it faces competition in the post-stay-at-home world and growing regulatory obstacles from lawmakers who think that gig workers should get better protection.

By mid-May, the food delivery platform had lost 50% from its February highs as as the economy opened up and people started eating out in restaurants again rather than chilling at home with a takeaway. Comforting earnings brought the stock back to life in May, though, and the firm is also looking to expand into the e-commerce and grocery space in a bid to diversify revenue streams. It’s moving gradually away from the food delivery vertical, and recently announced partnerships with pharma company RiteAid and petcare company Petco. It even launched introduced its own delivery stores, called DashMarts.

We believe the transition toward omnichannel local commerce will be a decades-long transformation that remains extremely early in its life cycle. In Q1, we made tremendous progress in building the tools to enable this transition and growing the scale of our platform,

said the company in its recent shareholder letter.

Fitzgerald clearly thinks the transition is heading for positive territory. Bu, despite having a 56% share of U.S. meal delivery sales, competition in the space is still intense and it’s difficult to stand out from the crowd.
May 052021

Downward spiral for DoorDash

DoorDash is down almost 25% in total since the U.S. Labour Secretary sent stocks dashing down by saying he believes gig workers should be classed as employees. The company fell 7.60% on April 29 and has continued its downward spiral all week, losing a further -5.22% on May 5.

DoorDash has had a rollercoaster ride since its fantastic IPO last year, but it looks like things could be heading downhill after Biden’s new labor secretary, Marty Walsh, came out as saying that gig workers in the United States should be classified as employees and deserve all related benefits like overtime, minimum wage, and health care. A policy shift on this would significantly raise costs for companies like DoorDash and Uber, who rely on gig workers. And a national decision on who does and doesn't classify could have major implications for the U.S. workforce, up to a third of which are gig workers or contractors.

"We are looking at it but in a lot of cases gig workers should be classified as employees... in some cases they are treated respectfully and in some cases they are not and I think it has to be consistent across the board,"

Walsh told Reuters in an interview, expressing his view on the topic for the first time and giving us an insight into the Biden administration's views on the issues.

"These companies are making profits and revenue and I'm not (going to) begrudge anyone for that because that's what we are about in America. But we also want to make sure that success trickles down to the worker," he said.

DoorDash went public in a stellar IPO last year that was one of the success stories of 2020, soaring 86% on its first day of trading and continuing up until warnings signs of a post-pandemic pull back began to emerge. Its Q4 earnings warned of declines in consumer engagement and order values as restaurants begin to open, but DoorDash still commands a good 55% of the U.S. food-delivery market.

Walsh is expected to boost Biden’s efforts to expand workers protections and deliver a labor movement win though, and these views could set the tone for how the new administration plans to handle the gig economy and the controversies around it. Any big changes could upend the company’s core business model, making it harder to reach profitability.
Apr 092021

Dashing through the pandemic

DoorDash announces the date for its next earnings release, and following the success of its barnstorming IPO back in December 2020, the masses are keen to pile in, forcing prices up by almost 10%.

The food delivery service listed amid the height of the COVID restrictions and while they may have made life tough for some companies, it didn’t seem to do DoorDash any harm. As people increasingly relied upon quick and easy deliveries, the company saw an explosion in demand, and total orders in Q4 were up a whopping 233%, with the company reporting a revenue increase of over 200% at $1.92 billion in the nine months through to September.

DoorDash priced its shares at $102 each on December 9, higher than its original range of $90-95, and the stock soared on arrival to close the day up over 86% at $189.51. The feast gave the firm a valuation of $72 billion - higher than the market cap of Domino’s and Chipotle combined. DoorDash raised $3.4 billion, making it one of the biggest IPOs of the year - which, as we recently saw with Deliveroo, is not always as easy as it looks.

However, there were always warnings that the tailwind from the pandemic might not last, and DoorDash is now down over 30% from its arrival highs. Almost 30% of people in the U.S. have received their vaccine, and there is some debate as to whether customers will see as much value in the company in their post-pandemic lives. Not only that, but DoorDash’s fees are fairly high and it has a lot of edgy and eager competitors, from UberEats to GrubHub, though DoorDash does have an edge in that it focuses largely on profitable suburban markets.

In its latest earnings report a few weeks ago, the company wrote

We hope markets will begin to open up soon. As that happens, we expect declines in consumer engagement and average order values, though the precise amount remains unclear,

and warned that outlook for the year is still “highly uncertain.”