![]() If you are looking to buy DoorDash stock, consider your current asset mix before you commit. That means DoorDash isn’t particularly recession-proof. Though it is thriving under the complex economic conditions brought about by the pandemic, it is reasonable to assume that under normal circumstances, people will hesitate to pay a 30 – 40 percent premium on restaurant meals during periods when budgets are tight. Does DoorDash Stock Fit Into Your Portfolio?Īs a food delivery service, DoorDash falls into the consumer discretionary category. At this point, when it comes to whether or not to buy DoorDash stock, the risk is high – but so are the potential rewards. The average 12-month projected stock price is $235.88, which represents a healthy upside – if the optimists are correct. Roughly half recommend buying DoorDash stock, while the rest are firmly in the “hold” camp. ![]() It’s clear that there is demand for delivery services, but how much are consumers willing to pay for convenience once the threat of COVID has passed?Īmong analysts, there is a definite split. Meanwhile, by the time delivery services like DoorDash account for their expenses, their per-order revenue isn’t quite enough to cover the bills. ![]() Considering restaurants’ average profit margins run between 7 and 22 percent, the current model simply isn’t sustainable. The trouble is that DoorDash hasn’t yet managed to generate a profit, and the restaurants it serves often break even – or lose money – on DoorDash orders despite the fact that customers pay a premium for delivery.ĭepending on a variety of factors, restaurants might pay between 15 percent and 30 percent to DoorDash and its peers in commissions. ![]() Specifically, investors want to know, “What is DoorDash stock’s investment potential?” If that effort is successful, the financial consequences to businesses using the resource-sharing model will be devastating.Īll of these concerns have investors wondering whether today’s share price is an opportunity to buy DoorDash stock at a discount before DoorDash stock goes up or if it is a sign that the stock is a poor choice for long-term growth. In some cases, there is a push to treat drivers as employees. Employment law hasn’t quite caught up with the gig economy, but many states are starting to question the independent contractor model that Uber, DoorDash, and similar services rely on. There are also a variety of looming legal issues to contend with. There are a variety of issues facing all of the food delivery companies – and the restaurants they serve – calling into question whether the model can ever truly be profitable. In the year following DoorDash stock’s IPO, share prices drifted down, rallied, and then began another decline. In fact, DoorDash stock opened trading at a price that was 80 percent higher than the IPO’s original $102 per share. That made it possible for the company to hold an IPO in December 2020, which was far more successful than anyone predicted. In the two years since COVID-19 upended the world, the US food delivery market more than doubled, and DoorDash ( DOOR) commands a healthy share of that market – more than 50 percent. When COVID hit, it was in the right place at the right time to scale up and achieve its original mission: to enable every merchant to deliver. Consumers who were once accustomed to limited delivery options lost interest in leaving home – and that meant any restaurant that wanted to stay in business had to adapt.ĭoorDash ( DOOR) is a delivery company modeled after sharing economy businesses like Uber ( UBER) and Airbnb ( ABNB). How to Buy DoorDash Stock: Food delivery has always been popular, but the COVID-19 pandemic turned this luxury into a necessity.
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