The food delivery industry hit its stride during the COVID-19 pandemic. With restaurants closed, most people learned how easy it is to have meals delivered with a button. DoorDash is the industry leader in the US, owning more than 50% of the market share for food and convenience deliveries. The company is an American multinational brand founded in Palo Alto, California, in 2013. Can you buy DoorDash stock?
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DoorDash (DASH) Stock Introduction
DoorDash is a San Francisco-based company that operates an online food ordering and delivery platform. They allow users to order food from their favorite restaurants and have it delivered directly to their door. In addition to food delivery, DoorDash also offers delivery services for groceries, convenience store items, pet food, and more. They have an interesting origin story, from humble beginnings to a global brand worth nearly $40 billion.
In 2012, a group of Stanford students created a website and mobile app for students who were getting food delivered to their dorms.
After some local businesses caught wind of it, the group, led by Tony Xu and Andy Fang, launched PaloAltoDelivery.com.
A year later, it was incorporated as DoorDash and received an initial investment of $120,000 from Y Combinator. Today, Xu remains the company’s CEO, and Fang is the CFO. So what about DoorDash stock?
Can I Buy DoorDash Stock?
Yes! In December 2020, DoorDash went public on the New York Stock Exchange under the NYSE: DASH ticker. The stock debuted at $175.00 per share for public traders. It was one of the most hyped IPOs of the year, and the interest in the stock was clear from the start. As a result, shares hit an all-time high price of $257.25 in November 2021.
The stock has nosedived in 2022, mostly due to the ongoing correction in growth stocks. DoorDash hit an all-time low price of $74.32 in March of 2022.
Since then, shares have stabilized somewhat, although they are trading at more than 100% lower than the highs set in 2021. The stock is also a component of the Russell 1000 growth index.
DoorDash Stock Business Operations
DoorDash is a global brand, although the company only officially operates in five countries: the US, Canada, Australia, Japan, and Germany. This seems limited, especially compared to some of its competitors.
However, DoorDash technically operates in over 23 countries through its other subsidiaries. So, let’s learn a bit about those!
DoorDash ($DASH) TipRanks Stock Forecast Report 3/24
Caviar
As the name suggests, Caviar is a food delivery platform for high-end restaurants. DoorDash acquired Caviar from fintech company Block (NYSE: SQ) in 2019 for $410 million.
The move integrated Caviar’s ability to deliver meals from restaurants that don’t usually offer a delivery service. In addition, it provided DoorDash with a full spectrum of options in select US markets like San Francisco, Los Angeles, and Seattle.
Scotty Labs
In 2019, DoorDash raised some eyebrows when it acquired Scotty Labs, an autonomous driving startup. But this isn’t just any autonomous driving company.
Scotty Labs is designing technology where people can control these vehicles remotely. You don’t have to be a rocket scientist to see how DoorDash can use this technology. We’ve all heard the likes of Elon Musk talk about robotaxis in the future.
Perhaps future generations of DoorDash delivery drivers will be dropping off meals with remote control from the other side of the country.
Chowbotics
Another fun technology acquisition by DoorDash in February of 2021.
Chowbotics is a robotic salad maker that can autonomously build salads in a vending machine.
How DoorDash will use the Chowbotics technology remains to be seen, but it could offer its own meals or menu items. Chowbotics is a cool idea that furthers the robotification of the food industry.
Wolt
The Wolt acquisition was a major one that caught the attention of the global food industry. Wolt is a major food delivery service in Europe and Asia. It operates in 23 different countries and well over 180 different cities.
DoorDash acquired Wolt in November of 2021 in a stock transaction worth $8.1 billion. But, of course, with the decrease in DoorDash stock, the company seems to have received a bit of a bargain at current price levels.
The Wolt integration provides DoorDash a major foothold in Europe, adding 2.5 million monthly active users to its ecosystem.
Miki Kuusi, the CEO of Wolt, will be joining DoorDash and will operate the company’s DoorDash International segment. The deal is expected to close in the second half of 2022.
BBOT
DoorDash continued its tech acquisition in 2022 by acquiring the touchless payments provider BBOT. The company also offers digital solutions like in-store ordering and providing digital analytics for your business. DoorDash’s acquisition of BBOT will help it continue to provide digital services to help its clients maximize their businesses.
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DoorDash Stock Competitors
While DoorDash owns a majority market share of the US, that doesn’t mean it is the only game in town. Far from it, actually! A few major brands stand out in an industry that is seeing ongoing consolidation.
You’ve probably heard of most of these and have probably even used them in the past. Here are some of the stocks for DoorDash’s biggest competitors!
1. Uber (NYSE: UBER)
UberEats is the food delivery segment of the global technology company Uber. The food delivery service was launched in 2014 and is now available in over 6,000 cities across 45 countries.
Uber itself started as a ride-hailing service to provide a cheaper and more available alternative to taxis. UberEats has skyrocketed in popularity and can be used to order delivery or pickup directly in the store. While it trails DoorDash’s US market share, it more than makes up for it globally.
2. Lyft (NASDAQ: LYFT)
Uber’s biggest competitor in terms of ride-sharing is Lyft. Lyft has not developed a food delivery service like UberEats or DoorDash. What the company has done is that it allows users to request their driver pick up an order from a restaurant for an extra fee. Is it ideal?
Not really. But it is an added option that Lyft users can utilize through its platform. The problem is most users aren’t loyal to either Lyft or Uber. So if they need a meal delivered, the ease of ordering it through Uber Eats or DoorDash will win out.
3. AliBaba (NYSE: BABA)
In China, super apps like AliPay from AliBaba and WeChat from Tencent reign supreme. These apps act as digital payment methods, so the integration of food delivery was a no-brainer. Users in countries that accept WeChat and AliPay can also use the apps to order food delivery. It also allows it to compete with China’s largest food delivery service, Meituan.
4. Grab (NYSE: GRAB)
Here’s an under-the-radar stock for investors seeking exposure to the South East Asian market. Grab went public via a SPAC merger and has performed terribly, losing more than 75% since it debuted. But the company is a major food delivery brand in Singapore, Malaysia, and Indonesia.
It services a market with nearly 1 billion people and offers many different delivery services. For food, Grab acquired the UberEats segment in South East Asia. Uber owns a 28% stake in Grab, so the two companies are tied together. DoorDash does not operate in the region, and if it ever plans to, Grab will be one of its major competitors.
DoorDash ($DASH) Stock Rover Research Report 3/24
DoorDash Stock Controversies
The company has not been without controversy in its ten years of existence. However, these allegations came in the past few years, as DoorDash has become a major global brand. Most significantly, DoorDash has been accused of monopolistic behavior with other US food delivery companies like Uber and GrubHub.
During the pandemic, DoorDash was accused of withholding tips from drivers and listing restaurants on its app that didn’t permit them to do so. This is significant because it can cause restaurants to lose business if people do not order from them on the app.
It’s an unfair way of losing revenues based on user preferences and the geographic location of the restaurant. This practice has been ruled illegal in California, where DoorDash is based.
Is DoorDash Stock a Good Investment?
The million-dollar question. Many people believed it to be a good investment when the IPO happened in December 2020. But IPOs generally come with a lot of hype and initial overinflated prices. The company picked the best time to debut as its brand was at an all-time high during the COVID-19 pandemic. Since then, investors probably have a different opinion on the stock.
But if you are talking about the long-term, DoorDash is probably positioned to continue to do well. The company continues to make smart acquisitions to bolster its portfolio of services. Time will tell how autonomous driving and robotic meal prep will affect the company’s plans. DoorDash is trading near all-time low levels, and even as the worst of the pandemic is seemingly behind us, food delivery is an industry that is here to stay.
Frequently Asked Questions
Yes. You can find it on the New York Stock Exchange under the NYSE: DASH ticker.
It's no surprise that they have a few! You've probably heard of most of these and have probably even used them in the past. Here are some of the stocks for DoorDash's biggest competitors:
- UberEats (NYSE: UBER)
- Lyft (NASDAQ: LYFT
- AliBaba (NYSE: BABA)
- Grab (NYSE: GRAB)
In 2019, someone blew the whistle that DoorDash was using customer tips to subsidize the base pay for its delivery drivers. As a result, some drivers got lower earnings than expected. Another cringe-worthy moment came in 2023 when DoorDash introduced a warning screen for customers placing orders without tips. How rude is that?!!!
DoorDash Inc is currently valued at USD 131.8, which is 70% overvalued.
