Is DoorDash (DASH) Pricing Look Compelling After Strong Multi Year Share Price Gains

• If you have been wondering whether DoorDash's current share price reflects its real worth, this article will walk through what the numbers are actually saying about the stock.
• DoorDash shares most recently closed at US$230.52, with returns of 1.8% over 7 days, 2.3% over 30 days, 4.9% year to date and 32.7% over 1 year. Over 3 years the return is around 3.5 times, and the 5 year return is 16.4%.
• Recent coverage around DoorDash has focused on its role in the broader food delivery and logistics space, including discussions about how major platforms are shaping on demand services and competition among large players. This context has helped frame how investors think about the stock's growth potential, risk profile and the price they are willing to pay.
• Simply Wall St currently gives DoorDash a valuation score of 2 out of 6. Next we will walk through what that means using different valuation approaches, before finishing with a way of thinking about value that goes beyond any single model.

DoorDash scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: DoorDash Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes the cash a company is expected to generate in the future, then discounts those projected cash flows back into today’s dollars to estimate what the business might be worth now.

For DoorDash, Simply Wall St uses a 2 Stage Free Cash Flow to Equity model. The company’s latest twelve month free cash flow is about $2.0b. Analysts provide explicit forecasts for the next few years, and beyond that Simply Wall St extrapolates, with projected free cash flow reaching $7.9b by 2030 and continuing with additional estimates out to 2035.

When all those future cash flows are discounted back to today, the model arrives at an estimated intrinsic value of about $367.81 per share. Compared with the recent share price of $230.52, this implies the stock is trading at roughly a 37.3% discount to that DCF estimate. The model interprets this as undervalued on this basis.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests DoorDash is undervalued by 37.3%. Track this in your watchlist or portfolio, or discover 884 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for DoorDash.

Approach 2: DoorDash Price vs Earnings

For profitable companies, the P/E ratio is a useful way to connect what you pay for each share with the earnings the business is currently generating. It gives you a quick sense of how many dollars investors are willing to pay for one dollar of earnings.

Expectations around future growth and the level of risk help set what feels like a “normal” or “fair” P/E range. Higher expected growth or lower perceived risk can justify a higher P/E, while lower growth or higher risk usually points to a lower multiple.

DoorDash currently trades on a P/E of 115.13x. That sits well above the Hospitality industry average of 22.81x and also above the peer average of 35.29x. Simply Wall St’s Fair Ratio for DoorDash is 50.52x, which is its proprietary estimate of what the P/E might be, given factors such as earnings growth, industry, profit margins, market cap and company specific risks.

The Fair Ratio can be more useful than simple peer or industry comparisons, because it adjusts for the company’s own growth profile, risk level and profitability rather than assuming all firms deserve similar multiples. Compared with the current P/E of 115.13x, the Fair Ratio of 50.52x suggests the shares are pricing in a higher level of optimism than this framework implies.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your DoorDash Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which let you tell a clear story about DoorDash by linking your view of its business to specific forecasts for revenue, earnings and margins, then turning that into a fair value you can easily compare with today’s price.

On Simply Wall St’s Community page, used by millions of investors, a Narrative is your own version of that story. You set assumptions like future growth rates, profit margins or a suitable P/E range, and the platform automatically translates those inputs into a Fair Value that sits side by side with the current market price so you can quickly see how your story compares with today’s price.

Because Narratives update when new information arrives, such as news, analyst targets or earnings, your DoorDash view stays current without you rebuilding spreadsheets. You can also see how other investors differ. For example, one Narrative might lean toward the higher US$360 analyst target and more optimistic margin assumptions, while another could anchor closer to the lower US$205 target with more cautious expectations. This gives you a clearer sense of the range of reasonable outcomes before you act.

Do you think there's more to the story for DoorDash? Head over to our Community to see what others are saying!

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.

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