To The Moon

DoorDash’s delicate balance: can strong momentum and fresh profitability sustain its run as a top stock pick?

I have watched DoorDash transform itself from a cash-hungry disruptor into a disciplined operator, and the numbers now force even sceptics to pay attention. With a market capitalisation above $112 billion and a share price that has nearly doubled over the past year, the company is no longer fighting for survival; it is defending a position of strength. The real question is whether this newfound profitability, coupled with relentless growth, is enough to justify its rich valuation and keep it on the radar as one of the best stocks to buy.

Momentum redefined: speed meets structure in a digital marketplace

Profitability finally in gear

For years, $DoorDash, Inc.(DASH)$ symbolised the excesses of the gig economy: fast growth but even faster cash burn. That narrative has shifted. Quarterly revenue is running close to $3 billion, growing at almost 25% year on year, while net income has turned positive at around $780 million on a trailing basis. Margins are still slim, with operating margin hovering near 6%, but for a delivery platform once viewed as structurally unprofitable, this is a genuine milestone.

The most underappreciated piece is cash discipline. The company now generates over $2 billion in operating cash flow, even if free cash flow is dented by reinvestment and acquisition costs. That distinction matters. Unlike during its early days, DoorDash can fund expansion from internal cash generation rather than constantly tapping markets. Investors sometimes underestimate how powerful that shift is—it effectively lowers the long-term cost of capital and gives management more strategic freedom.

Advertising and services: the quiet margin engine

Delivery fees may grab the headlines, but they are no longer the only way DoorDash makes money. I think the overlooked story is its fast-growing advertising platform. Merchants now pay to secure digital shelf space in the app, and this higher-margin revenue stream is quietly changing the economics. Advertising spend is sticky—once restaurants commit budget, they are unlikely to pull back unless sales fall.

Add in enterprise services, like logistics support for non-food retailers, and DoorDash is beginning to resemble a technology-enabled marketplace rather than just a courier network. That shift matters for valuation. At nearly 10 times sales, investors are not paying for a low-margin delivery business; they are betting on the rise of a diversified platform. The PEG ratio of 0.66 suggests earnings growth expectations remain robust relative to price, though the current trailing P/E north of 140 keeps the stock in nosebleed territory.

A global dash with Deliveroo

The proposed acquisition of Deliveroo has the potential to reshape DoorDash’s international footprint. In theory, it expands scale, strengthens negotiating power with restaurants, and spreads fixed costs over a larger base. But the execution challenges are not trivial. DoorDash will need to reconcile overlapping technology platforms, align merchant pricing strategies, and navigate differences in labour regulation across Europe. Cultural fit also matters—Deliveroo’s partnerships in the UK may not adapt seamlessly to a US-style model, and any missteps could spark customer churn. Regulators will be scrutinising market concentration and worker protections, and delays in approval could prolong integration costs.

Yet the deal offers an intriguing strategic twist: Deliveroo’s established presence in the UK and parts of Europe complements DoorDash’s dominance in the US. If executed well, it could accelerate the pivot toward profitability outside North America, something few analysts are fully pricing in.

Balancing momentum and risk on a razor-thin edge

Competition doesn’t deliver easily

DoorDash may be a juggernaut in the US with over 60% market share, but rivals are hardly rolling over. Uber Eats is particularly dangerous because it can bundle delivery discounts into Uber One, making it harder for DoorDash to protect take rates without joining a race to the bottom. $Just Eat Takeaway.com N.V.(JTKWY)$ and $Delivery Hero AG NA(DLVHF)$, while more Europe-focused, have used aggressive discounting tactics that could eventually spill across markets, threatening margin expansion. Even Grubhub, though diminished, retains loyal regional pockets that could erode share if DoorDash raises fees too aggressively.

DoorDash races ahead while rivals stumble for footing

The advantage DoorDash currently enjoys is relative scale in the US and the ability to monetise merchants through advertising and services, which its peers are only partially replicating. However, the high beta of 1.7 shows the stock remains sensitive to competitive shocks and broader market sentiment.

Valuation: priced for perfection?

At more than 145 times trailing earnings, DoorDash is not cheap. Even on a forward P/E of around 61, the shares demand flawless execution. But the valuation is supported by momentum: the stock has gained nearly 90% in twelve months, far outpacing the S&P 500. With revenue growth close to 25% and EPS scaling faster, the high multiple is at least grounded in fundamentals.

Support bands show strength beneath stretched valuations

An insight worth noting is the short interest—just over 3% of float. For a stock with such rapid gains, the relatively low level of bearish bets suggests that sceptics have been squeezed out. That in itself adds to near-term strength, as there is little fuel left for a sharp short-driven reversal.

Verdict: still worth a seat at the table

I see DoorDash as a company finally proving its model can work at scale. Profitability, once the glaring hole, has turned from weakness into a selling point. Its advertising platform offers a less appreciated growth lever, and the Deliveroo acquisition—though risky—could expand its global reach.

For investors, the next 6–12 months carry clear signals to watch. Rapid ad revenue growth would confirm the margin story, while smooth Deliveroo integration would ease regulatory fears. On the downside, slowing US order volume or intensifying competition from Uber Eats would be red flags.

Is it one of the best stocks to buy? If you are looking for steady dividends or bargain valuations, absolutely not. But if you believe in platforms that dominate consumer behaviour and can leverage scale into adjacent services, I think $DoorDash, Inc.(DASH)$ deserves serious consideration. Momentum alone does not make a stock a winner, but when coupled with improving fundamentals, it can be surprisingly durable. For now, I am inclined to keep DoorDash firmly on my watchlist—and perhaps, when the price dips from these lofty highs, even on my buy list.

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