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DoorDash DASH shares are currently overvalued, as suggested by its Value Score of F.
In terms of the forward 12-month Price/Sales ratio, DASH is trading at 5.94, higher than its median of 5.12 and the industry’s 4.75.
Price/Sales (F12M)
Image Source: Zacks Investment Research
However, DoorDash’s shares have rallied 13.2% in the year-to-date period, significantly outperforming the Zacks Internet - Services industry’s decrease of 11.3% and the broader Zacks Computer & Technology sector’s decline of 8.2%.
DASH Outperformed Sector, Industry
Image Source: Zacks Investment Research
The outperformance can be attributed to strong order growth and rising Marketplace GOV, along with enhanced logistics efficiency and a growing contribution from advertising.
Can DoorDash sustain its strong order growth and rising Marketplace GOV to justify its premium valuation?
DoorDash Expands Partners to Boost Grocery Delivery Reach
DoorDash is benefiting from an expanding clientele, which has enhanced its order volume and resulted in a year-over-year increase of 19% in the fourth quarter of 2024. The metric reached a total of 685 million orders. The marketplace GOV also experienced robust growth of 21%, totaling $21.3 billion, reflecting strong demand across platforms.
DoorDash’s expanding partner base has been noteworthy. It includes Ibotta IBTA, Walmart’s Canadian division Walmart Canada, Wegmans Food Markets, Lyft, Warner Bros. Discovery’s streaming service, Max, and JPMorgan Chase & Co.’s U.S. consumer and commercial banking division, Chase, which have acted as catalysts for growth, significantly broadening DoorDash’s reach and enhancing its service offerings.
In January, DASH partnered with Ibotta to integrate the latter’s extensive catalog of digital promotions into DoorDash’s platform. This offers customers personalized savings across various categories while providing CPG brands with enhanced opportunities to reach consumers through DoorDash’s 115,000+ non-restaurant stores through the Ibotta Performance Network’s AI-driven pay-per-sale promotions.
Through DoorDash Canada and Walmart Canada’s nationwide collaboration, Canadians now have access to grocery and general merchandise from over 300 Walmart Supercenters via DoorDash’s app and website. This initiative strengthens DoorDash’s grocery delivery presence and underscores its ability to facilitate seamless shopping experiences beyond traditional restaurant partnerships.
DASH Grows With Home Depot Partnership for Quick Delivery
DoorDash has expanded its offerings beyond restaurants, such as launching its commerce platform and growing its presence in grocery delivery and other local commerce categories. The success in expanding to new verticals has contributed positively to revenue and market shares.
Building on this success in January, DASH announced a partnership with The Home Depot HD, enabling on-demand delivery of home improvement essentials directly through the DoorDash app.
The collaboration with Home Depot allows customers and professionals to have products delivered in as little as an hour, enhancing convenience for DIY projects and job sites. With more than 115,000 non-restaurant stores available, DoorDash continues to expand its marketplace, offering a variety of products beyond food.