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DoorDash Reports Strong Q4; Raising Fair Value to $163

Demand for food delivery remains strong; we see this as undervalued.

DoorDash DASH reported strong-fourth quarter 2021 results as the top- and bottom-line beat FactSet consensus estimates. The firm’s network-effect moat source remains intact, demonstrated by continuing growth in orders, order frequency, and merchants on the firm’s platform. Take rates dipped a bit, which was expected as the supply side for DoorDash and other food delivery platforms is facing increasing competition from the recovery in ride-hailing, which is attracting drivers again. In the U.S., we expect DoorDash and Uber to attract couriers and improve the supply side of their platforms. We think DoorDash’s more aggressive investments to widen its delivery service and geography, combined with more couriers, could yield attractive returns in terms of more subscribers and higher frequency. We only slightly adjusted our model, which when combined with the time value of money increased DoorDash’s fair value estimate to $163 from $160, representing attractive upside.

DoorDash's fourth-quarter gross order volume increased 36% year over year and 7% sequentially to $11.2 billion due to further adoption of food delivery by consumers and the firm's efforts to provide delivery services for other businesses and goods. Higher demand was indicated by 35% year-over-year growth in total orders to 369 million. In addition, gross order volume generated per order increased 1% from 2020.e

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