DoorDash (DASH) Valuation in Focus After Expanding McDonald’s Partnership With New Direct Ordering Channel

DoorDash and McDonald’s Team Up for App-Free McDelivery: What Does It Mean for Investors?

If you own DoorDash (DASH) shares or are considering them, the company’s latest move with McDonald’s is something to pay close attention to. DoorDash and McDonald’s have just introduced a new way for customers in the U.S. to order McDelivery directly from McDonalds.com. The highlight is that no app downloads, logins, or extra steps are required. By handling the “last mile” through Dashers, DoorDash gains prominent access alongside one of the world’s largest restaurant brands, expanding its reach further into daily routines and making delivery a more integrated part of fast food ordering.

For DoorDash, this is more than just a technical improvement. It signals a deeper partnership with McDonald’s, now spanning 29 countries. Investors have taken notice. In addition to this new McDonald’s arrangement, DoorDash recently announced several deals, such as integrations with sports clubs and partnerships with college football programs, demonstrating its continued commitment to expanding where and how it delivers.

With share prices responding to growth and expansion announcements, the key question for investors is whether there is still value remaining, or if today’s valuation already reflects much of this future potential.

Most Popular Narrative: 14.2% Undervalued

According to community narrative, DoorDash is considered undervalued, with analysts viewing international expansion and automation as major drivers of future success and profit growth.

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

Want to know what’s fueling this bullish price target? The key to this valuation is aggressive global expansion and technological leaps, both of which are setting the stage for significant profit potential. Are DoorDash’s projections too ambitious, or not bold enough? Dive into the full narrative to uncover the hidden assumptions and the surprising formula behind today’s fair value.

Result: Fair Value of $289.80 (UNDERVALUED)

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

However, risks remain, including rising labor costs and the complexity of scaling internationally. These factors could pressure DoorDash’s margins and slow expected growth.

Find out about the key risks to this DoorDash narrative.

Another View: Can a Cash Flow Perspective Tell a Different Story?

Looking at DoorDash’s value from a cash flow angle, our SWS DCF model suggests the shares are trading below what future cash flows imply. This challenges the notion that price tags are too high. What if the market is underestimating long-term potential?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out DoorDash for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own DoorDash Narrative

If you have a different take or want to dig into the numbers your own way, you can build a custom narrative in just a few minutes. Do it your way

A great starting point for your DoorDash research is our analysis highlighting 3 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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