For reference, DoorDash’s invested capital increased $813 million (92% of 2019 revenue) year-over-year in 2019 and $3.9 billion (137% of 2020 revenue) YoY in 2020.įundamental Research Provides Clarity in Frothy MarketsĢ022 has quickly shown investors that fundamentals matter and stocks don’t only go up. This assumption is highly unlikely but creates best-case scenarios that demonstrate how high expectations embedded in the current valuation are. Implied GOV: DCF ScenariosĭASH DCF Implied Gross Order Volume New Constructs, LLCĮach of the above scenarios assume DoorDash grows revenue, NOPAT, and FCF without increasing working capital or fixed assets. DoorDash’s current stock price implies its GOV ten years from now will be nearly four times greater than Uber’s TTM bookings.įigure 2: Historical GOV vs. For reference, I also include the bookings of Uber, which represent the total dollars spent on Uber’s platform, similar to DoorDash’s GOV metric. This scenario may prove too optimistic as it assumes a significant improvement in NOPAT margin in an increasingly commoditized industry.įigure 2 compares DoorDash’s implied future gross order volume in these scenarios to its historical GOV. At its 3Q21 take rate, this scenario equates to over $125 billion in gross order volume in 2030, which would equal 40% of the projected 2030 TAM. Even in this scenario, DoorDash would earn $15.3 billion in revenue in 2030. The stock is, optimistically, worth just $34/share today – a 67% downside.
grows revenue by 11% (expected industry CAGR through 2028) each year thereafter through 2030, then.grows revenue by consensus estimates in 2021, 2022, and 2023, and.improves its NOPAT margin to 6% (equal to FedEx’s TTM NOPAT margin),.In other words, to justify DoorDash’s current price of ~$103/share, the firm must capture 94% of the projected 2030 global food delivery TAM, compared to ~32% over the trailing twelve months.Ħ7% Downside Even if DoorDash Matches Industry GrowthĭoorDash’s economic book value, or no growth value, is negative $33/share, which illustrates the overly optimistic expectations in its stock price. Take rate measures the percentage of GOV DoorDash captures as revenue. At its 3Q21 take rate of 12.2%, this scenario equates to ~$294 billion in marketplace gross order volume (GOV) for DoorDash in 2030. In this scenario, DoorDash would earn nearly $36 billion in revenue in 2030. grow revenue by 25% (above consensus estimate in 2023 and 2.5x expected industry growth) each year thereafter through 2030.grow revenue by consensus estimates in 2021, 2022, and 2023, and.Immediately improve its NOPAT margin to 7.6% (average of logistics providers United Parcel Service and FedEx’s TTM NOPAT margin, compared to DoorDash’s margin of -15% in 2020 and -7% in 3Q21),.To justify its current price of ~$104/share, DoorDash must:
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