Is It Too Late to Consider DoorDash After Its 333% Three Year Surge?

• If you are wondering whether DoorDash is still a smart buy after its huge run, or if you are late to the party, this article unpacks what the current price implies about its value.
• DoorDash has climbed 1.1% over the last week, 9.9% over the past month, and 33.3% year to date, with a 333.1% gain over three years that has meaningfully changed how the market prices its risk and growth story.
• Recent headlines have focused on DoorDash doubling down on its logistics network and expanding beyond restaurant delivery into categories like groceries and retail partnerships. This supports a narrative of a broader commerce platform rather than a single niche app. At the same time, investors have been paying close attention to regulatory developments around gig work and competition in last mile delivery, both of which influence sentiment around how durable these gains may be.
• Right now, DoorDash scores 3/6 on our valuation checks, which means half of our tests still flag it as not obviously undervalued. Next, we will break down what different valuation methods are indicating about the stock today, and then finish with a more holistic way to think about value beyond any single model.

DoorDash delivered 29.9% returns over the last year. See how this stacks up to the rest of the Hospitality industry.

Approach 1: DoorDash Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future and discounting those cash flows back to today. For DoorDash, the model starts from last twelve months free cash flow of about $2.0 billion and builds up a path of growth over the next decade.

Analysts supply detailed forecasts for the next few years, and beyond that Simply Wall St extrapolates slower growth as DoorDash matures. Under this two stage Free Cash Flow to Equity approach, free cash flow is projected to rise to roughly $9.7 billion by 2035, still in dollars but at a more moderate growth rate than today.

When all those future cash flows are discounted back, the model arrives at an intrinsic value of about $304 per share. Compared with the current market price, that implies DoorDash is roughly 25.3% undervalued on this DCF view. This indicates that, under this model, the market may not be fully pricing in its long term cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests DoorDash is undervalued by 25.3%. Track this in your watchlist or portfolio, or discover 908 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for DoorDash.

Approach 2: DoorDash Price vs Earnings

For profitable companies like DoorDash, the Price to Earnings, or PE, ratio is a useful way to gauge how much investors are willing to pay for each dollar of current earnings. A higher PE can be justified when a business is expected to grow earnings quickly and has relatively lower perceived risk, while slower growth or higher uncertainty usually calls for a lower, more conservative multiple.

DoorDash currently trades on a PE of about 113.6x, which is far above both the Hospitality industry average of roughly 24.6x and the peer group average of about 34.8x. To move beyond these blunt comparisons, Simply Wall St estimates a Fair Ratio of around 50.1x. This reflects what a more reasonable PE might be given DoorDash’s specific growth outlook, profitability profile, industry, market cap, and risk factors.

This Fair Ratio is more informative than a simple peer or industry comparison because it adjusts for how quickly DoorDash is expected to compound earnings and how risky that growth may be. When the Fair Ratio of 50.1x is compared with the current PE of 113.6x, the shares look meaningfully above what the fundamentals justify on this metric.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1444 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your DoorDash Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework on Simply Wall St’s Community page that lets you attach a clear story to your numbers by linking your view on DoorDash’s future revenue, earnings, and margins to a financial forecast and, ultimately, to a fair value that you can compare against today’s share price to decide whether to buy, hold, or sell. The platform keeps that Narrative updated as new earnings, news, and data come in. One investor might build a bullish DoorDash Narrative around rapid global expansion, higher margins, and a fair value near the top end of recent analyst targets. Another, more cautious investor could create a Narrative that bakes in slower growth, regulatory drag, and a fair value closer to the low end of the range. Both perspectives are made tangible, comparable, and easier to act on.

Do you think there's more to the story for DoorDash? Head over to our Community to see what others are saying!

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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