Our stock analysts brought two recent IPOs under coverage.
First is DoorDash. Consumers use DoorDash's app to order food for pickup or delivery from restaurants. DoorDash holds the number one position as an online food order aggregator in the U.S., ahead of Uber Eats and Grubhub. DoorDash is in the early stages of trying to attract a larger piece of what we estimate could be $1 trillion worth of goods and services by 2025 to its platform. DoorDash benefits from the network effects between merchants, deliverers, and consumers, plus intangible assets in the form of data. We assign DoorDash a narrow economic moat rating and a fair value estimate of $142 per share.
Next is SoFi Technologies. In our view, SoFi has found an unfilled product need in the marketplace. SoFi uses its mobile app and website to target young, high-income individuals that may be underserved by traditional full-service banks. Unlike other digital banking companies, which generally have limited product offerings, SoFi offers a full suite of financial services and products that includes everything from student loans to estate planning, positioning the company as a digital one-stop shop for financial services. While the breadth of SoFi's product offerings is impressive, the company has used partnerships to speed up deployment of new products. As a result, SoFi faces the risk that a rival firm could use a similar methodology to replicate its model. For now, though, SoFi has been able to use its first-mover advantage and substantial reward spending to drive rapid growth. We assign SoFi Technologies a $20.50 per share fair value estimate and a no-moat rating.
Senior analyst Ali Mogharabi and analyst Michael Miller contributed the research behind this report.