DASH DoorDash
Local delivery network with durable density moat; the price already assumes flawless margin expansion.
The story
DoorDash is the dominant US food delivery marketplace (roughly two-thirds share) and is expanding into grocery, retail, ads and international markets through Wolt and Deliveroo. Its moat is local network density: more consumers, merchants and Dashers drive better unit economics and faster delivery, and DashPass subscriptions create loyalty. It is moving from hypergrowth into profitable scale, with GAAP margins just turning positive while revenue still grows about 20% a year.
About 20% growth fades over a 10-year runway as grocery, ads and international mature. Margins rise from about 5% toward 15%, which reflects marketplace scale and ad mix but is capped by labor costs and competition. Sales-to-capital of 1.8 is above the acquisition-inflated 1.25 because organic growth is asset-light, and beta of 1.2 reflects consumer-discretionary cyclicality.
Value drivers
| Revenue growth (Y1) | 20.0% |
| Terminal growth | 3.5% |
| Forecast horizon | 10y |
| Target operating margin | 15.0% |
| Years to target margin | 7 |
| Sales-to-capital | 1.80 |
| Beta | 1.20 |
| Failure probability | 2.0% |
| Cost of capital (WACC) | 10.5% |
| Terminal WACC | 9.6% |
Valuation bridge
| PV of explicit FCFF | 11.98B |
| PV of terminal value | 28.37B |
| Equity value | 41.15B |
| ÷ shares → per share | $94.97 |
News
bullish +0.25 · 8 articles
- Wendy's (WEN) Franchise Strains and Dividend Cut Could Be A Game Changer For Investors
- Lowe's Companies (LOW) Starts 20 Minute Drone Delivery Pilot
- The Gig’s Up: Robotaxis, Delivery Drones Reshape the Side-Hustle Market
- Costco killed a popular member perk and finally says why
- Costco Ends Its Fiscal Year on a High Note, Eyes Big Expansion
- Costco aims to build loyalty with younger shoppers
- Serve Robotics Targets a $450B Market: How Big Is Its Growth Runway?
- Uber Has Disappointed For More Than a Year: Here’s Why a Highly Respected Wall Street Firm Says It’s Going to Double
Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 19.07B | 20.0% | 6.3% | 1.18B | 1.77B | -581.14M | -526.11M |
| 2 | 22.53B | 18.2% | 7.7% | 1.73B | 1.92B | -199.01M | -163.10M |
| 3 | 26.21B | 16.3% | 9.2% | 2.39B | 2.04B | 341.78M | 253.59M |
| 4 | 30.01B | 14.5% | 10.6% | 3.17B | 2.11B | 1.05B | 708.58M |
| 5 | 33.82B | 12.7% | 12.1% | 4.06B | 2.11B | 1.94B | 1.18B |
| 6 | 37.48B | 10.8% | 13.5% | 5.04B | 2.04B | 3.00B | 1.65B |
| 7 | 40.85B | 9.0% | 15.0% | 6.08B | 1.87B | 4.21B | 2.10B |
| 8 | 43.78B | 7.2% | 15.0% | 6.52B | 1.63B | 4.89B | 2.21B |
| 9 | 46.12B | 5.3% | 15.0% | 6.87B | 1.30B | 5.57B | 2.27B |
| 10 | 47.73B | 3.5% | 15.0% | 7.11B | 896.71M | 6.21B | 2.30B |
Key risks
- Gig-worker classification and minimum-pay regulation raising delivery costs
- Competition from Uber Eats, Instacart and Amazon compressing take rates
- Integration and margin drag from the Deliveroo acquisition and international expansion
Catalysts
- Advertising revenue scaling at high incremental margins
- Grocery and retail categories reaching profitability, plus autonomous delivery lowering cost per order