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Can DoorDash and Walmart Partnership Push DASH Stock Higher?

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DoorDash Canada (DASH - Free Report) recently announced a nationwide collaboration with Walmart Canada, giving Canadians greater access to on-demand delivery of groceries and general merchandise essentials.  

Through DoorDash’s user-friendly app and website, customers can now shop tens of thousands of items from over 300 Walmart Supercenters across the country, including popular private label brands like Great Value, Equate, and Mainstays. 

The partnership aims to address the increasing demand for affordable and convenient shopping by providing customers with reliable doorstep delivery. DashPass subscribers benefit further with $0 delivery fees and reduced service fees on eligible orders.

DASH’s Growing Portfolio and Partnerships Boost Prospects

DoorDash’s expanding clientele, which includes Walmart Canada, Wegmans Food Markets, Warner Bros. Discovery’s (WBD - Free Report) streaming service, Max, JPMorgan Chase & Co.’s (JPM - Free Report) U.S. consumer and commercial banking division, Chase, and Lyft (LYFT - Free Report) , have acted as catalysts for growth, significantly broadening DoorDash’s reach and enhancing its service offerings.

In August, DASH announced a partnership with Warner Bros. Discovery’s streaming service, Max, allowing DashPass Annual Plan members to access Max With Ads at no additional cost, enhancing its streaming and food delivery experience. This approach is likely to attract more subscribers, further boosting DoorDash’s order volume.

DoorDash also expanded its partnership with JPMorgan Chase & Co.’s U.S. consumer and commercial banking division, Chase, offering extended DashPass benefits, including up to $10 off monthly promos for Sapphire cardmembers and new benefits for Freedom and Slate cardholders.

In October, DoorDash and Lyft announced a partnership to provide benefits on rides and local delivery. DashPass members would be able to avail monthly benefits on ridesharing at no additional cost, and eligible Lyft riders would receive a free trial of DashPass.

DASH’s expanding portfolio has also been a major growth driver. In September, the company introduced a suite of new products, including the DoorDash Commerce Platform, to help merchants grow and manage businesses on its channels, both in-store and online.

DoorDash’s Offers Strong Q4 Guidance

DoorDash’s strength in total orders and Marketplace GOV is expected to benefit its top-line growth. It is also gaining momentum in new verticals, particularly in the grocery segment, further strengthening its growth potential.

DASH’s shares have also surged 81% in the year-to-date period compared with the broader Zacks Computer & Technology sector’s appreciation of 27.6%. 

For the fourth quarter, DoorDash anticipates Marketplace GOV in the range of $20.6-$21 billion.

The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $2.83 billion, indicating 22.81% year-over-year growth.

The Zacks Consensus Estimate for earnings is pegged at 33 cents per share, indicating an increase of 65% in the past 30 days. The figure indicates year-over-year growth of 184.62%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

What Should Investors Do With DASH Stock?

We point out that DoorDash stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.

In terms of Price/Book ratio, DASH is trading at 9.82X, higher than the Zacks Internet - Services industry’s 5.69X.

However, DoorDash’s strong portfolio and expanding partner base are contributing to its growth prospects continuously, driving top-line growth.

DASH stock currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks Proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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