DoorDash has almost the same MarketCap as Uber
Nov 23, 2021
17 Comments
DD only does food/grocery delivery and only has us market right? On the other hand uber has everything DD has and on top of that, uber has freight, ride sharing, etc and runs globally by having for example didi stocks. How is DD not overvalued?
comments
OPs post just lists possible markets, and is correct that DD largely does not participate in those markets. Yet.
That "yet" is probably why the market values DD and Uber similarly.
Let's look at the main market where we compete - US food delivery. We executed for years against much better funded companies, to arrive at market dominance with better retention and margins. Ref: https://secondmeasure.com/datapoints/food-delivery-services-grubhub-uber-eats-doordash-postmates/
Could we do it again in those untapped markets? Maybe, maybe not. It's a reasonable gamble though. And hey look we are winning US convenience a year after starting 7 years behind the market leader - https://trends.edison.tech/research/convenience-store-delivery-sales.html
There's a comment about can DD just copy Uber blog, and some comment about design. That glosses over all the hidden stuff which is not visible but critical (assignment algorithms, partnerships, consumer retention, dasher pay calculators, everything). It's like saying just copy the HTML on the google search page, it's largely irrelevant.
So yeah. I think DD is undervalued. But what do I know, I just have access to info which is not publicly available.
The trend does NOT suggest a 4x multiple stock with 1/4 revenue.
Probably net income of DD is -101M whereas for Uber, it’s -2.5B. That would freak out investors I guess? But that’s not the only reason.
Google focused on one thing and executed while Yahoo was too bloated and leaked valuable talent to Google.
DD recruiters are working pretty hard that they email us 4, 5 times a year, I personally just declined at first sight, but someone may join 🤷♂️
There’s some questionable stuff like dipping into dashers’ tips to boost the bottom line, adding restaurants without approval that is unique to DD, but those are more execution issues than design decisions.
Valuation doesn’t really make sense comparatively (see Rivian), but then again that’s true all over tech. Things will tend to even once people realize that Uber is undervalued relative to competitors.