Market Sentiment Around Loss-Making DoorDash, Inc. (NYSE:DASH)

By
Simply Wall St
Published
May 06, 2022
NYSE:DASH
Source: Shutterstock

With the business potentially at an important milestone, we thought we'd take a closer look at DoorDash, Inc.'s (NYSE:DASH) future prospects. DoorDash, Inc. operates a logistics platform that connects merchants, consumers, and dashers in the United States and internationally. On 31 December 2021, the US$26b market-cap company posted a loss of US$468m for its most recent financial year. As path to profitability is the topic on DoorDash's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for DoorDash

Consensus from 27 of the American Online Retail analysts is that DoorDash is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$48m in 2024. So, the company is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 58% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
NYSE:DASH Earnings Per Share Growth May 6th 2022

Underlying developments driving DoorDash's growth isn’t the focus of this broad overview, though, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that DoorDash has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of DoorDash to cover in one brief article, but the key fundamentals for the company can all be found in one place – DoorDash's company page on Simply Wall St. We've also put together a list of pertinent factors you should look at:

  1. 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.
  2. 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.
  3. 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.

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