DoorDash, Inc. (DASH): A Bull Case Theory

We came across a bullish thesis on DoorDash, Inc. (DASH) on Substack by Sabar Capital. In this article, we will summarize the bulls’ thesis on DASH. DoorDash, Inc. (DASH)’s share was trading at $205.09 as of May 2^nd. DASH’s trailing and forward P/E were 707.21 and 86.21 respectively according to Yahoo Finance.

DoorDash, founded in 2013, operates a logistics and commerce platform connecting merchants, consumers, and delivery drivers (Dashers), with a dominant presence in food delivery and growing exposure to other verticals. Its core offerings include the DoorDash Marketplace, Wolt Marketplace, and Commerce Platform, serving over 42 million monthly active users globally, with 22 million members subscribed to DashPass and Wolt+. The platform helps merchants with critical business operations such as customer acquisition, demand generation, order fulfillment, payment processing, and support, while monetizing via merchant fees, consumer delivery and service charges, and advertising. DoorDash has steadily built a strong ecosystem by focusing on marketplace efficiency, where more consumers attract more merchants, which in turn draws more Dashers—creating a positive flywheel that boosts scale and profitability.

The company commands a dominant 67% share of the U.S. food delivery market, rising from under 10% in 2016, outperforming peers like Uber Eats and Grubhub, and even absorbing competitors such as Caviar in 2019 to strengthen its premium restaurant offering. One of the key drivers of DoorDash’s success is its early and strategic focus on underserved suburban and smaller metropolitan areas, which helped it carve out defensible growth. Equally important is its merchant-first approach, designed to accommodate businesses of all sizes through seamless integrations with various order intake systems and POS solutions. The Commerce Platform, which includes DoorDash Drive and Wolt Drive, expands the company’s reach beyond its own marketplaces by enabling white-label delivery and a suite of services such as branded app development, order management, and analytics tools. This empowers merchants to retain brand identity and customer relationships while benefiting from DoorDash’s logistics backbone.

Beyond food, DoorDash is actively expanding into adjacent categories like groceries, pharmacy, convenience, and pet supplies to broaden its total addressable market. It also has meaningful international ambitions, with the Wolt acquisition extending its presence to over 30 countries. While the competitive landscape remains fierce and customer retention is a constant challenge, DoorDash continues to execute effectively, sustaining growth and profitability as of 2024. However, with a P/S ratio of 6.5, much of its future potential may already be priced in. Nevertheless, the company’s platform strength, sticky user base, and growing non-food verticals position it well for long-term upside. If DoorDash can continue to scale its platform and deepen its relationships with merchants and consumers, it stands to remain a formidable player in local commerce logistics.

DoorDash, Inc. (DASH) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 88 hedge fund portfolios held DASH at the end of the fourth quarter which was 73 in the previous quarter. While we acknowledge the risk and potential of DASH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DASH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.