DoorDash (DASH): Evaluating Valuation After a 11% Share Price Pullback

DoorDash (DASH) shares have drifted downward in recent weeks, slipping around 11% over the past month. Investors seem to be weighing valuation after a year of strong gains, even as the company reported double-digit annual revenue and net income growth.

See our latest analysis for DoorDash.

Despite some recent softness, DoorDash’s momentum this past year is hard to ignore. While the share price has pulled back roughly 11% over the past month, its year-to-date share price return remains impressive at nearly 42%. Looking back even further, long-term holders have been rewarded with a 54% total shareholder return over the last year and a remarkable 365% total return over three years. After such a strong run, the current pullback feels more like a breather rather than a reversal of the broader growth story as investors reassess how much future upside is already priced in.

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The question now is whether DoorDash’s stock still holds untapped value after such a run, or if the current price fully reflects its future potential. This could mean there is little room for outsized returns from here.

Most Popular Narrative: 20% Undervalued

At $242.05, DoorDash trades well below the fair value estimate of $302.53 set by the most popular narrative. This suggests meaningful upside from current levels if the assumptions hold true. This viewpoint depends on the company's success in capitalizing on ambitious growth catalysts and financial projections through 2028.

Rapid expansion into new verticals (grocery, retail, convenience, pharmacy) and international markets is yielding faster growth rates and improving unit economics. This diversification is expected to accelerate topline revenue while supporting net margin expansion.

Read the complete narrative.

Want to know the formula behind this bullish price target? The narrative relies on DoorDash driving growth in fresh markets and reshaping its profit base. Which aggressive projections and bold margin estimates make this fair value possible? Find out how future bets and high growth targets power the most optimistic predictions yet.

Result: Fair Value of $302.53 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising costs and the challenge of sustaining margin growth amid rapid expansion remain crucial risks that could quickly alter this optimistic outlook.

Find out about the key risks to this DoorDash narrative.

Another View: What Do Multiples Say?

While some see DoorDash as undervalued based on projected growth, its current price-to-earnings ratio is sky-high at 132.4x. This is significantly above the US Hospitality industry average of 23.5x and the peer average of 28.6x. Even the fair ratio for DoorDash sits at just 53.2x, suggesting that valuation risk remains if growth expectations aren’t met. Will the market keep rewarding this premium, or could sentiment shift?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own DoorDash Narrative

If you think there’s more to the story or want to dig into the numbers yourself, you can shape your own view in just minutes with Do it your way.

A great starting point for your DoorDash research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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