We feel now is a pretty good time to analyse DoorDash, Inc.'s (NYSE:DASH) business as it appears the company may be on the cusp of a considerable accomplishment. DoorDash, Inc. operates a logistics platform that connects merchants, consumers, and dashers in the United States and internationally. The company’s loss has recently broadened since it announced a US$461m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$625m, moving it further away from breakeven. As path to profitability is the topic on DoorDash's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
According to the 21 industry analysts covering DoorDash, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$87m in 2023. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 69% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Given this is a high-level overview, we won’t go into details of DoorDash's upcoming projects, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one aspect worth mentioning. DoorDash currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.
This article is not intended to be a comprehensive analysis on DoorDash, so if you are interested in understanding the company at a deeper level, take a look at DoorDash's company page on Simply Wall St. We've also compiled a list of key aspects you should look at:
- Valuation: What is DoorDash worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether DoorDash is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on DoorDash’s board and the CEO’s background.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.