Market Sentiment Around Loss-Making DoorDash, Inc. (NYSE:DASH)

·3 min read

We feel now is a pretty good time to analyse DoorDash, Inc.'s (NYSE:DASH) business as it appears the company may be on the cusp of a considerable accomplishment. DoorDash, Inc. operates a logistics platform that connects merchants, consumers, and dashers in the United States and internationally. The US$26b market-cap company posted a loss in its most recent financial year of US$468m and a latest trailing-twelve-month loss of US$525m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on DoorDash's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for DoorDash

Consensus from 27 of the American Online Retail analysts is that DoorDash is on the verge of breakeven. They expect the company to post a final loss in 2023, before turning a profit of US$304k in 2024. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 73% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for DoorDash given that this is a high-level summary, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. DoorDash currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which usually has a high level of debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on DoorDash, so if you are interested in understanding the company at a deeper level, take a look at DoorDash's company page on Simply Wall St. We've also put together a list of key aspects you should further research:

  1. Valuation: What is DoorDash worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether DoorDash is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on DoorDash’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.