DoorDash, Inc. (NASDAQ:DASH)’s shares are down by 12.5% over the past year and by 1.3% year-to-date. On August 6th, the shares closed 2.9% higher after the firm’s second quarter earnings report on the 5th. Cramer commented on DoorDash, Inc. (NASDAQ:DASH) as part of his discussion about the earnings season. The CNBC TV host discussed DoorDash, Inc. (NASDAQ:DASH), along with Uber:
“The only one that was not trashed today. . .was DoorDash. People just loved the DoorDash. And, they liked DoorDash as much as they didn’t like Uber. A lot of people I think shorted DoorDash on Uber cause they’ve go so much overlap and that was obviously a bad trade.”
DoorDash, Inc. (NASDAQ:DASH)’s second quarter results were a strong set of numbers on many fronts. They saw the firm’s operating cash flow and free cash flow jump 87% and 109% to $944 million and $742 million. Additionally, orders jumped to $970 million and revenue grew by 36% to $4.45 billion. DoorDash, Inc. (NASDAQ:DASH)’s market gross order value (GOV) grew by 36% to $33 billion. All of these metrics suggest that the firm is currently in a growth phase and is gaining market share. However, on the bearish front, DoorDash, Inc. (NASDAQ:DASH)’s second quarter GAAP net income dropped by 30% to $200 million while its R&D expenses jumped by 52% to $535 million. Additionally, the firm could also face headwinds from regulatory action on its gig worker minimum wages and inflation eating into discretionary spending. DoorDash, Inc. (NASDAQ:DASH) could be in trouble if these headwinds come right at the time it is spending heavily on automated delivery platforms.
As for Uber Technologies, Inc. (NYSE:UBER), the shares are down by 17.9% over the past year and by 8.3% year-to-date. They closed 5% lower on the 5th after it reported second quarter earnings. The dip occurred despite the fact that Uber Technologies, Inc. (NYSE:UBER)’s TTM free cash flow crossed the $10 billion mark for the first time, its bookings grew by 24% annually to $58 billion and trips increased 18% to $3.87 billion. The firm’s revenue missed analyst estimates, while earnings beat the estimates. Consequently, these figures also fit into bullish and bearish viewpoints. The future could be bright for Uber Technologies, Inc. (NYSE:UBER) should it continue strong gross bookings growth, maintain solid free cash flows and retain growth in delivery despite challenges from DoorDash. Yet, should its $10 billion in spending for autonomy backfire or costs increase to dent margins, then the firm might experience tailwinds.
Looking at hedge fund sentiment, 117 funds in Q1 held a stake in DASH, while the figure was 153 for UBER, which indicated that the funds prefer diversification and scale. Valuation-wise, DASH’s forward P/E multiple of 76.34 is significantly higher than UBER’s 22.68. So is short interest, with 4.48% of the float short compared to the latter’s 2.41%.
While Insider Monkey acknowledges 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 have limited downside risk. If you are looking for an AI stock that is more promising than DASH that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
